5 reasons Finance Directors aren’t expensive accountants?
We’ve partnered up with Tectona Partnership who provide experienced part time or interim CFO’s or Finance Directors.
Tectona Partnership is a close-knit team of commercial, qualified Accountants – these seasoned professionals really set Tectona apart from any other agency. They provide sound financial advice to help your business go from strength to strength.
Mark Nicholls, MD of Tectona Partnership clarifies the misconceptions of hiring a part time FD:
Just last month, I was reminded of the misunderstanding of the value of a Finance Director. In my meeting with this particular MD we got onto the subject of his finance department (or lack of it). His view was that he saw no need to recruit an expensive FD (or “bean counter” to use his description) when his sales were growing and he had plenty of cash in the bank.
Even though it is hard to argue with the simplicity of this statement, it is perhaps worth making a few observations. These seem to be some of the recurring challenges:
1.Surely an FD is just an expensive accountant? – If you set out to recruit ‘just’ an accountant then that is what you will get. You should see the recruitment of an FD as a key member of the senior management team. He or she will typically not just focus on the numbers – they often take responsibility for a number of other functional areas including HR, IT, legal and manage key relationships (for example with your bank). They will be critical to the business planning process.
- Why not get my accountant to produce the figures? – Producing the figures is only half the story. An FD will be able to interpret what these figures mean and project forward rather than simply focus on historic performance. When it comes to agreeing with customers those difficult price rises, surely it would be better to have accurate information on how cost of sales and overheads are likely to move going forwards. In doing so you are more likely to preserve hard earned profit margins.
- Why do I need to have regular management information? – The discipline of regular and robust financial information is critical to good decision-making. The profitability of individual customer relationships is often not visible to many MDs. It can often go unnoticed that the most significant relationships are becoming less profitable over time.
- The FD will only try to prevent the sales team from selling? – A very fair challenge if the team are making unprofitable sales! Getting the right individual (with a strong commercial background) means the FD will work alongside the sales team, helping to set the parameters for profitable deals. It is also very important is have the right processes in place to collect the cash from these profitable deals on a timely basis.
All the above is interesting but I have managed perfectly well in the past – so why change? – If the strategy for the business is growth then recruiting an FD is essential. Some businesses are blessed with plenty of opportunities but limited management bandwidth means it is impossible to pursue them all. An FD will provide valuable input on which opportunities are likely to be the most profitable, and therefore should be prioritised. Also many sectors are seeing consolidation with acquisition targets attractively priced; an experienced FD will be able to identify, negotiate, execute and integrate these acquisitions.
Moving your business forward is key, but you’ll struggle without the help of an FD. This strategic position can be the difference between profit and loss, success or failure. It’s all about business strategy.
At Tectona Partnership our approach is all about getting the management right. If you put in place the right executive positions, you’ll get the finances right.
Our team of fully qualified and highly experienced finance directors regularly roll up their sleeves to help you:
- Regain financial control
- Improve cash flow
- Review bank facilities and advise on structure of funding
- Review (large spend) projects and implications
- Improve profitability
- Resolve tax issues
- Identify and attain funding for growth
- Implement new accounting systems
If you are not sure which of the above might apply to you, or have a nagging feeling that something needs unpicking, why not let Tectona take the strain?
Our Tectona Ten Healthcheck is a brilliant yet simple way to home in on the mission critical issues in your business. You will get a prioritised Action Plan – and we include 4 x half days of FD support to help you really start making a difference.
What are your benefits?
- You will have insight into the important factors impacting your financial performance
- You will understand how to improve your cash position and funding requirements
- You will have identified and explored strategic and commercial options for growth
- You will identify deficiencies in your management information
- Above all, your assumptions and current practices will have been challenged by independent experts, giving you assurance that you are on the right track.
http://www.tectonapartnership.com/services/tectona-10-healthcheck/
info@tectonapartnership.com
+44 (020) 3503 0002