By Jeff Macklin
Many professional services such as public relations have been outsourced for many years, but outsourcing a financial director is a relatively new concept. Over the last five years however, many smaller companies have recognised the benefit of engaging outside experience on a part-time basis. Though employing an experienced full-time FD would normally be difficult for a small business, outsourcing brings a wealth of experience at a fraction of the cost.
An FD in general will provide financial management linked to the delivery of business performance and development, helping it to achieve the best possible results and sometimes to avoid failure. FDs also ensure the company’s cash-flow is fluid, with enough money to operate and with efficient, effective financial controls so that cash is accounted for correctly. FDs can also provide timely management information, supporting decision-making processes by ensuring that significant decisions are subject to proper financial analysis
An experienced FD will of course be a qualified accountant of some form, but he or she must be more than this. Most will have commercial experience and will bring a wide breadth of commercial skills to help a business grow.
Vitally, part-time FDs add flexibility in periods of growth, meaning that a business can react to change with professional assistance when required. Initially, this might only mean one or two days per month, but may also include project-based capacity for example with acquisitions, flotations and management buy-outs, or offering advice on raising funds and managing investor relationships.
Of course, when a company reaches a certain size, it will inevitably need (and be able to afford) to employ full-time assistance as the workload begins to increase. However, as more and more owner-managed businesses become aware of the advantages of employing part-time expertise, for smaller companies it might not be too long before financial directors join the list of commonly outsourced professional services.