What are the benefits of an outsourced FD?

It’s no secret that business-owners have to wear a lot of hats, from marketing to sales to customer service. Managing finances is a specialist and potentially time-consuming task, leading most to engage an accountant to handle their affairs. However, sometimes businesses need an extra level of support, particularly when it comes to growth. For this, an outsourced finance director (FD) can be hugely beneficial.

Gary Heywood explains the role of an outsourced FD, the benefits it can provide for your business and the best ways of working together to maximise value.

What is an outsourced FD?

A finance director is a leadership role within a business, responsible for budgeting, finances, reporting and financial strategy. Working together with the owner or CEO, the FD helps ensure that the resources within the business are allocated properly, tracked and optimised to reach the goals of the organisation.

Experience is a key factor, providing constructive challenge to the board and being a collaborative partner for different parts of the organisation based on unbiased expertise. However, some businesses reach a point of needing the advice of an experienced FD, but only for a particular project or length of time.

This might be a period of expansion or a particularly large project, but one that doesn’t yet require a full-time FD. In this scenario an outsourced FD can provide the value required on a controlled basis, bringing an independent and objective viewpoint to your financial management.

When do I need an outsourced FD?

Full time internal finance directors are specialist roles and can be expensive for smaller businesses to source and onboard. Outsourced FD functions are most common for businesses that have temporary or limited need for the expertise and input of an experienced FD.

Potential scenarios where a business might consider bringing on an outsourced FD include:

• Planning a period of significant growth

• Taking on additional levels of risk, such as a new client negotiation, fundraising or international expansion

• Changing the structure or purpose of the business

What are the benefits of an outsourced FD?

By using an outsourced FD, your business can access the expertise of an experienced financial professional without the cost and responsibilities of bringing on a full-time, in-house candidate for the role.

Responsibilities for an outsourced FD can include:

• Setting up and reviewing processes for bookkeeping and general accounting tasks

• Establishing and overseeing KPIs and reporting to management

• Overseeing your VAT procedures and other tax processes

• Advising on expansion, growth, financial planning and strategy

• Representing the financial interests of the business at board and investor meetings

• Advising on cash flow management and seeking additional finance

• Assisting with the preparation of fully integrated budgets, to include profit and loss, balance sheet and cash flow

How to work with an outsourced FD

In order to provide value, an outsourced FD requires a degree of integration with your business which should be reflected in the way you work together. This includes:

• Access to accounting, bookkeeping and business intelligence information

• Regular meetings with the director and board to discuss key financial processes and strategy

• Visibility into the future plans of the business and upcoming financial requirements

• Clear targets and benchmarks for financial goals within the organisation

The advantage of working with an outsourced professional is that this process can be scaled with the needs of the business, adding additional time or responsibilities as the scope of the work changes. For example, in the run up to raising finance it could be useful to have additional support from your FD.

How we can help

The key foundation for a successful outsourced FD function is close relationships and reliable financial information.

For this reason, it can be much easier to integrate your FD service with your existing accounting provider as they already have the systems in place, knowledge of your business and relationships with key stakeholders to be able to advise you on your future plans.

At Haines Watts, we work with businesses across nearly every sector, helping them navigate the financial landscape with confidence.

We work with a variety of stakeholders, investors, banks and other professionals, generating a wealth of knowledge that we can use to help you meet your goals. Our team includes sector experts as well as subject matter specialists who can empower your business with the advice of an expert and well-connected finance professional on your terms.

To find out how we can play a larger role in your business and help you achieve your goals through outsourced FD services, get in touch with us today.