As any small business owner will know, your business’s aspirations may not always match your budget.
And while you need to spend money to make money, difficulties arise when the expertise needed to optimise that spend also comes with the hefty price tag associated with an internal senior hire.
Luckily, in the modern age of staffing and specialisation, small businesses have more access than ever before to a six-figure finance director… at an SME budget.
What is a VFD, and what can they do for your business?
The key? Working with a Virtual Finance Director (VFD), a senior-level finance expert who acts as an extension of your leadership team, offering strategic insight, financial direction and team guidance.
Virtual Finance Directors bring a wealth of experience from across industries, at a price more scalable and affordable than that of a full-time senior hire, and are usually backed by an entire outsourced finance team with breadth of knowledge across specialisations.
This allows businesses to access an expert financial leader as well as an entire specialised finance team at a fraction of the cost.
After all, more businesses than not need director-level finance experience and guidance, but on a part-time basis, and without the full-time overhead. Whether that’s due to a one-off project like a merger or an ongoing strategic arrangement, VFD’s help fill that gap.
Working as a bridge between the finance team and the board, a Virtual Finance Director is a strong investment in the strategic financial side of the business.
VFDs are typically responsible for:
- Financial strategy and guidance – VFDs turn figures into a clear story, offering a look into what is driving performance, what may be shifting and areas in the business that require attention.
- Cash flow and forecasting – VFDs build and maintain cash flow forecasts, flag pinch points early and help business leaders plan ahead with better visibility.
- Performance reporting – VFDs provide expert reporting that helps keep the team aligned, leadership informed and planning strategic.
- Decision-making support – VFDs act as a sounding board for any large business decisions, looking at situations from a financial perspective and offering practical input and clear recommendations.
- Financial controls and optimisation – VFDs look to improve existing internal processes and safeguards, helping to support improved risk management and keeping the business audit-ready.
- Leadership support and guidance – VFDs will attend management and board meetings, acting as the financial arm of the leadership team.
These responsibilities can shift and change over time, and are often bespoke to the needs and current situation of the business.
When a small business should think about bringing in support
If an SME finds itself facing complex financial decisions or situations, it is likely time to look at bringing in a VFD.
Alternatively, a VFD may be required when internal processes and financial systems have room for improvement, and doing so would impact the overall success of a business (hint: more often than not, cleaner systems mean better business success).
Similarly, one-off projects that require expert oversight (such as acquisitions or mergers) are also a good time to look at bringing in external support.
Overall, VFDs can be key to accessing a strong structure, more strategic thinking, detailed forecasting and greater financial control for small businesses. Whether that’s needed on a one-off basis or for a longer period, once an SME feels that they need a higher level of knowledge to keep their business moving forward, it is time to consider bringing in a VFD.
Choosing the right VFD
Unlike full-time hires, VFDs shouldn’t be expected to have extensive experience within a single business niche in order to thrive. In fact, many VFDs point towards the wide breadth of knowledge garnered via a wide array of clients as one of their strongest attributes. This experience offers a unique perspective and can provide a deeper understanding of the market as a whole.
When seeking a VFD, expertise and company comprehension are key. Business leaders should look for a VFD whom they trust and who they feel can truly understand the structure and goals of their company.
Furthermore, business leaders should consider their needs going forward and seek a VFD that can align with those plans. If the business only requires help for a short-term project, they shouldn’t look to work with a VFD that specialises in long-term growth. Contrastingly, if they’re seeking to scale responsibilities over time, they shouldn’t look to work with a VFD that specialises in project work.
Finding a VFD who is knowledgeable, displays a deep understanding of the business and is open to scaling work is key.
Learn more about working with a VFD
Oftentimes, the best way to find out whether a VFD is a good fit for your business is to book a discovery call with a provider. Many VFDs offer a free, no obligation conversation to discuss whether your business could benefit from a VFD, and what that may look like in practice.
Ultimately, if you find your business on the cusp of requiring external help, it’s better to seek support proactively rather than waiting for messes to form down the line. If you think your business could benefit from a financial expert, the best thing to do is ask.
Craig Shorto (main picture) is the Managing Director of Offshore Group, one of the Channel Islands’ most trusted providers of outsourced financial services. Based in Guernsey and Jersey, Offshore Group supports local businesses, corporate service providers, intermediaries and international clients with reliable, practical solutions in accounting, payroll, tax and financial control.
