Every company will benefit from expert advice from an experienced finance director. However, those within the retail space often rely on the kind of financial clarity and strategic direction that an FD can bring into the mix, because their industry is not only fast-moving, but susceptible to wider trends and economic conditions, too.
If you’re not yet convinced that hiring an outsourced finance director for your retail firm is the right move, read on to discover what a dedicated finance professional can offer your leadership team.
What can an outsourced finance director bring to the table?
Longer term planning and forecasting
So much can change for retail businesses, seemingly overnight – which is why it’s so important to plan for any eventuality. FDs will use historical financial data and projections to anticipate your company’s future financial performance and identify areas that need to be addressed to lower risk.
For example, increases to the national minimum wage which are outside the control of the business can have a significant effect on a retailer’s cashflow and profitability and being prepared for such changes will minimise the risk to the business.
Realistic financial forecasts and budgeting also help to ensure resources are allocated to the correct areas and enough funds are kept back for contingency purposes.
Enhanced cost control and management
A good FD will be able to identify areas where money can be saved, and cash flow can be protected. For example, perhaps operations can be streamlined to keep overheads to a minimum, or cheaper deals can be negotiated with suppliers.
Whilst many sectors can rely on invoicing and direct bank payments, retail businesses often have the added burden of customers using cash to buy goods. Monitoring and managing cash receipts can be time consuming and represents additional risk for retailers in a sector where staff are typically paid below the real living wage.
Being removed from the day-to-day and having a bird’s eye view of the business’ financial affairs is an advantage for your finance director; it can enable them to spot opportunities for bigger profit margins that management might have previously missed.
Greater stability
Outsourced finance directors can help businesses identify potential risks, develop risk mitigation strategies, and implement internal controls to safeguard financial assets. With their expertise in financial analysis and reporting, FDs can provide valuable insights to help businesses make informed decisions and minimise financial risks; put simply, they are a strong hand in what can often be an unpredictable and volatile market!
Faster scalability
Outsourced finance directors can adapt to the changing needs of a retail business, providing the kind of scalability and flexibility that may be challenging to achieve with your in-house finance team. Whether your business is experiencing rapid growth or facing financial constraints, an outsourced finance director can adjust his or her input accordingly, ensuring that all aspects of financial management are aligned with the business’s evolving goals and objectives.
A strategic mind
A part-time finance director or virtual CFO can provide an objective perspective on a retail business’s financial performance and strategy. Unlike internal employees, who may be influenced by internal politics or biases, outsourced finance directors can offer an independent viewpoint based on their expertise and experience in the retail arena. This objectivity can be invaluable for identifying opportunities for improvement, addressing financial challenges, and driving business growth. In short, an FD’s insight can help to back up any big business decisions (or help avoid choices that could put your company in financial jeopardy).
A more cost-efficient solution
Hiring a full-time, in-house finance director can be an expensive undertaking for any retail business, especially for smaller or medium-sized enterprises who are trying to break through the ceiling and take their operations to the next level. Outsourcing the finance director role allows companies to access high-quality financial expertise without the overhead costs associated that are typically associated with hiring a full-time employee.
This list is by no means exhaustive. Finance directors with specific experience in the retail sector can manage practically any and all tasks relating to the financial health and feasibility of your retail business, and these responsibilities can span from comprehensive tax planning all the way through to managing supplier and stakeholder relationships and running more effective board meetings.
To find out how the team of outsourced finance directors here at Dartcell can support your retail organisation, contact us today.