The Guardian recently reported, for example, that British firms are currently facing their steepest increase in production costs on record. This, in turn, is causing many such companies to strongly consider raising their prices.
As for why we are starting this article by referring to such ever-heightening costs, the short answer is because concerns about costs is one of the key factors driving many businesses to consider outsourced part-time financial director services.
If this describes the situation your business is presently in, the chances are that you already have some awareness of the importance of the finance director, or FD, position to the success of your company. And it is true that many firms have reached the point in the aftermath of successive coronavirus lockdowns, where they might not be in the best position to afford a full-time FD.
In that situation, the knowledge and experience of the right out-of-house finance director can be invaluable. Employing a finance director in a full-time role in your company can be expensive – not just because of their likely demands with regards to salary and other benefits, but also because even the process of advertising for and hiring a suitable candidate incurs its own costs.
But don’t outsource your FD role purely to save costs!
Taking advantage of an outsourced FD service like the one we can provide at Practical CFO, then, can be a very wise course of action for both lowering your business’s costs and retaining your access to someone who is highly skilled and experienced in this position.
However, it is also important to emphasise that the decision to outsource your company’s financial director position should never be made on cost grounds alone. So, we thought we would outline some of the other reasons outsourced finance director services can be so useful.
1. The right outsourced finance director will be a genuine expert
Up to this point in the article, we haven’t outlined exactly what a finance director – or ‘financial director’, if you prefer – does.
There is no one way to describe the role of a finance director. However, it is perhaps instructive to turn to the Institute of Directors (IoD), which has said that finance directors contribute to the attainment of a company’s business objectives by “providing strategic and financial guidance to ensure that the company’s financial commitments are met”, and “developing all necessary policies and procedures to ensure the sound financial management and control of the company’s business.”
Any company’s financial director, then, will play an imperative role in the firm’s health and success, including by keeping a close eye on how the business is doing financially, and developing and implementing strategies for managing cash flow.
The key thing to remember is that when you outsource your company’s FD position to a reputable provider of outsourced FD services such as Practical CFO, you will still get to benefit from the same kind of expertise a full-time in-house FD offers.
Indeed, outsourcing has long been renowned as a way for businesses to gain access to specialists who they might not have been able to afford if they were attempting to hire them for a permanent in-house role.
2. Outsourcing frees up your time as a business owner
Other than costs, one of the most frequently cited reasons for organisations choosing to outsource their finance director function, is so that they can free up time to focus on other aspects of running their business.
After all, especially as the economy continues its resurgence from the lows of the pandemic, you will probably wish to focus your own efforts – as a company owner or founder – squarely on growth.
By outsourcing the financial director role in your company, you can help ensure you continue to have a seasoned professional by your side who can advise you as you make crucial decisions on financing, expenditure, new products or services, staffing, and much more.
At the same time, when you turn to Practical CFO for these services, your outsourced FD will be a genuine specialist, helping to relieve some of your day-to-day burden at this challenging time.
3. The outsourced FD can help with decision-making
We touched on this a little above, but it bears re-emphasis; an outsourced financial director will not be a mere ‘add-on’ to your business, or someone you only consult from time to time. Instead, they will play a central role in making (and keeping) your company healthy and successful, including by providing timely and useful management decisions that will assist you with your decision-making.
As the business owner or founder, of course, you will still be the one ultimately in charge. However, a capable financial director will be a great source of advice and information that will help you to make all the right decisions for your business at the right times.
4. They offer flexibility as you grow and scale your business
The coronavirus crisis has taught business owners many things – not least that sometimes, a business needs the agility to quickly scale down, as well as up. Whatever your business’s size and circumstances are at any given time, it’s good to know that the scale and nature of the services offered by your financial director can be easily and cost-effectively adapted to suit.
And this will be precisely the situation when you outsource your FD position, instead of keeping them on a full-time payroll. But at the same time, if you wish to eventually move your finance director role back in-house as you grow, that can also be easily done when you outsource.
5. They help your business to remain compliant
There is constantly new legislation coming on stream that may be relevant to your business in some way – and if so, it is crucial to have arrangements in place to ensure consistent compliance.
An outsourced FD can serve as an extra pair of eyes who stays alert to those legislative and regulatory changes, and provides the external advice needed to ensure you adapt your company’s systems and reporting accordingly. Otherwise, it can be so easy for today’s busy firms to inadvertently find themselves in breach of what might be complicated and confusing rules.
With our outsourced finance director services at Practical CFO being designed around the aspirations and needs of start-ups, SMEs and other growing businesses alike, you can be confident that our service will be well-matched to your expectations.
When it comes to getting your business’s financial planning, compliance and strategy for growth right, the right outsourced FD service will be crucial. Contact our team today for an in-depth discussion of your business’s requirements from such an important service.
