As the modern business world continues to evolve at a rapid rate, many businesses find themselves facing more intense growing pains than ever before when it comes to sourcing an expert team at a reliable and financially viable rate.
In particular, SMEs and scaling businesses struggle to access financial guidance, with the expertise of a Finance Director crucial to reaching the next stage of growth, yet often prohibitive due to the high price tag.
Luckily, today’s business world is just as innovative as it is swift, and expert financial leaders known as Virtual Finance Directors or VFDS have stepped in to fill that gap.
What’s a VFD?
Virtual Finance Directors are seasoned financial leaders who support businesses on an outsourced basis, providing the strategic insight of an in-house Finance Director without the full-time overhead.
As the name implies, VFDs often function on a virtual basis, making them especially adaptable and accessible.
Unlike an interim Chief Financial Officer or FD, VFDs are not in-house team members on a shorter contract, but rather long-term collaborators that scale with the business’s needs. Instead of filling a temporary gap, VFDs provide highly scalable support at a more accessible price tag and support through everything from transitions and temporary gaps to ongoing and routine day-to-day tasks.
Why have businesses increasingly started turning towards VFDs for their finance department?
More than ever, the marketplace is filled with promising SMEs and scaling businesses that are grappling with the cost of a full-time, senior finance hire.
Add this to the increasingly flexible nature of modern workplaces, and many of these businesses are seeking a new solution to their staffing problem, risking stagnation if they don’t bring in senior-level talent.
With these factors in mind, when weighing the pros and cons of bringing on a VFD versus hiring in-house, many businesses are leaning towards the flexibility, scalability, level of expertise and comfortable pricing of a VFD – especially when considering the added benefits of a VFD service, such as access to a full team of experts and a host of specialised tools that they otherwise wouldn’t have.
While there are still many cases where an in-house hire better suits a business, VFDs are filling the gap for those who aren’t quite at that stage.
What a VFD can do for your business
VFDs offer a host of services and support that are designed to grow and change with your business.
Strategic guidance in the boardroom
For many businesses, one of the biggest gaps in their finance team is a strategic leader able to synthesise business learnings and advise on how to utilise that knowledge to grow. VFDs provide this strategic arm, sitting alongside internal leadership and guiding the team on key business decisions. They view all company changes and decisions through the financial lens and can guide and provide feedback to the team based on that knowledge.
This proves vital for businesses looking to grow to the next level.
Recurring support that powers growth
As a long-term collaborator, VFDs are able to help support the day-to-day finance needs of a business, whether that be cash flow management, budgeting, implementing systems or managing an internal finance team. Rather than working on one project at a time, VFDs provide ongoing strategic and operational support for businesses.
Access to an entire team of Experts
Oftentimes, VFDs work as part of a larger outsourced finance function made up of other outsourced finance professionals. This means that, in addition to regular and direct work with their VFD, businesses will typically also have access to the collective expertise of a team of accountants, tax specialists, payroll experts, and system professionals.
Broad experience, tailored support
With the support of an entire expert team behind them, alongside experience working at a senior level across a variety of businesses, VFDs are able to bring a uniquely broad pool of knowledge into the business. Unlike in-house FDs, who likely spend anywhere from one to twenty years within a single business or industry at a time, VFDs can experience a multitude of industries, growth stages and challenges at a high level in a very short amount of time before bringing that expertise into your business.
Enhanced reporting and financial visibility
Instead of relying on baseline reporting, VFDs add an in-depth view of business figures and how they can be utilised going forward. Providing more robust reporting, forecasting and KPIs, VFDs can take this information and help the business make truly informed decisions when it comes to growth and change. If and when big changes like a business sale come up, VFDs then provide the expertise to take things a step further and help leadership navigate the complexities of due diligence, financial modelling, and investor negotiations.
The future of finance teams
When done well, working with a VFD shouldn’t be a tickbox exercise on a one-off project; it should act as an ongoing partnership that bolsters a business. VFDs, by nature, will embed into a business’s leadership team and help to anticipate challenges, seize business opportunities, and drive commercial success.
As the business world continues to evolve and more and more businesses seek strong growth and reliable leadership, VFDs will continue to provide expertise and support at an approachable price tag. And, if the business trends surrounding flexible work, affordable staffing, and specialist expertise continue, VFDs will continue to be the perfect bridge for scaling businesses of all sizes.
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.
