The importance of the FD in growing your Business
Not all small and medium enterprises (SMEs) employ a full time Finance Director (FD).
Ultimately the benefits of bringing professional financial management to the company, together with the need for strategic planning, will lead to such an appointment.
As SMEs grow the need for an FD is more apparent . . .
to instigate processes & oversee internal controls, even if they aren’t on the premises every working hour. By keeping a handle on information and analysis can avoid problems before they happen.
The advantage to appointing outside is that the FD will be able to take a more dispassionate view of the company’s development.
When it comes to accountability, a FD will provide a professional account of the company finances.
The decision on when to appoint an FD isn’t a simple case of numbers – some larger organisations manage well without one, and some smaller turnover businesses appoint early, especially when engaged in complex transactions.
During a period of rapid growth, a company will really benefit from having a FD who prioritises cash flow and prepares a strategic plan.
The role of a FD will be governed by the needs of the company. Smaller businesses need more flexibility and in addition to providing financial advice may need assistance with contract negotiations or even book keeping.
The best FDs have a commercial background and will involve themselves in all areas of the business, looking for ways to emphasise the importance of finance and improve on existing strategy throughout.