Virtual Finance Director – Your Business in Safe Hands

The question is why are many business owners unhappy, and are you one of them?

When you set up your business you probably did it because:

Freedom

To work when, how and where you wanted.

Control

Over your life to do the things that make you happy and spend time with your loved ones.

Money

To enable you to do the above without worrying.

But now you’re in business, you’re far from achieving any of the above!

You’re the MD or CEO of your business but what you do day-to-day is far from the strategic input you should be spending your time on.

Instead you see yourself spending your time:

Fighting fires
Recruiting and managing staff
Dealing with customer complaints
Managing cash flow
Trying to make sense of your finances
Trying to win new business
and the list goes on!

Is your business achieving its full potential?

Most businesses fail or don’t achieve their potential because they don’t have a handle on the numbers, or the owners work in and not on the business.

“Too many business owners think they can run their business just from seeing what their bank account is doing but that is the cause of so many failures””

Profitability is key to any business’ success. Cash is key to your business’ survival.

Monitoring both profitability and cash is therefore the difference between success and failure.

You were not trained in finance, yet you are trying to manage and oversee the finances of your business alone. You might be making profit, but have no cash. Or you could have cash in the account and think you’re doing well but are actually making no profit.

Too many business owners think they can run their business just from seeing what their bank account is doing, but sadly that is the cause of so many failures. There is a reason it takes years to qualify as an Accountant, understand double entry bookkeeping and how to understand the key numbers!

If you are serious about growing your business and ensuring your future financial sustainability, you need a Finance Director or equivalent on board. All large companies have one.

The problem…

The problem is, smaller businesses simply cannot afford to employ a full, or even part time, FD. According to glassdoor.co.uk, the average base salary of an FD in the UK is £77,000 to £122,000, and this is before recruitment costs & risks, plus any bonuses, benefits, pensions, etc. are added in.

Clearly this is a huge financial commitment, out of reach for most SME businesses.

The role of a Finance Director is critical in ensuring the financial sustainability and future of a business, especially when it gets to certain size (about £1m in turnover or more than 5 in the team). This is why every large business has an FD or CFO that sits on the Board of Directors.

However, it’s exactly these SME businesses that need access to this level of finance input the MOST! That’s what you need and where we can help.

The Solution – a Virtual Finance Director (VFD)

You get a bespoke Virtual FD service at often less than the cost of a junior staff member.
Don’t let the word ‘virtual’ put you off. It may be techy sounding but our service is very much based on you and your business.

What does the word ‘virtual’ mean? We work on your numbers in our office and meet you regularly. You choose how much help you need, and you get access to our experienced finance professionals – who have managed the entire finance function for other businesses like yours. But you don’t need to pay a full-time directors salary plus benefits.

So, what benefits can a VFD bring to you?

The clue is in the word Director, being someone who directs your future. You need good Directors on your Board, to work with you to direct the future of your business in the areas of the business in which you are not an expert.

You benefit because you can hand over the responsibility of managing your finance function to an experienced professional, comfortable that it’s all done properly, to let you concentrate on what you’re good at and growing your business.

You get a combination of a sounding board, business coach, and a strategic financial expert, partnering up with you to help you achieve your business objectives. Other benefits include:

Synchronisation of your financial data with your business objectives

to ensure you receive useful targeted management information to help you make better decisions.

Provision of real time management information

You get timely analysis of all of the numbers that matter.

Strategic financial input

on how to grow your business.

Powerful introductions

with real impact.

Having your finance team report

to someone who can hold them to account.

An efficiently run finance system

using the latest tech to save you money and time. Help to get finance A proper financial structure, so you can to grow your business with confidence.

Helping you to build

a profitable, sustainable, valuable and saleable business.

Managing financial risk

in your business that may otherwise catch you unaware.

Virtual FD vs Employed FD

Considering your options

If you are considering employing an FD on a full or part time basis, here are some aspects to consider against our Virtual FD offering.

Recruitment

It’s hard to find any staff, let alone highly skilled staff that will have a huge impact on your business. It will take time to find the right person not to mention the recruitment risk along with the fees that would be payable.

Cost

The average based salary of an FD is between £77,000 and £122,000 before national insurance, bonuses, pension and other benefits expected at that level. Plus their equipment and software needs.

Access

If you hire someone part time then how will you manage when something needs to be done on the days that they are not with you? The same applies for holiday cover.

Flexibility

Once you employ someone, it’s difficult to change hours or days. With a Virtual FD its completely flexible – you can increase or decrease your package depending on the need in your business.

Industry standard / best practice

With an employed FD the skill set is limited to the individual. With our service, you benefit from a wider skill set, direct experience in your sector and up to date knowledge on technological advancements that can be of benefit to you.

What is your investment?

Every business is unique. Your objectives and requirements will be different to another business owner’s. You will be at a different stage in your business compared to someone else.

We provide you with a range of options so you can choose the package that best meets with your needs.

For each of those packages we give you a fixed price, so you can budget and plan. And each of these packages can be tailored, so you get what you want.

In other words you’re in complete control and can build the Virtual FD package that best meets your needs and budget.

Your options at a glance

Whatever the stage of your business, you will find one of our Virtual FD packages to suit your needs. The table below summarises what is included within each of our Virtual FD service packages. To help you identify the best option for you here is a quick overview:

Growth FD – This is the best option for ambitious business owners who are on a growth strategy to build and scale their business. Here we work closely with you in all aspects of the business’s financial systems and processes, building financial projections, helping you to achieve your growth targets and providing regular management reporting from which you can make better decisions, to build and measure your business’s value.

Reliance FD – This is the best option for business owners who may have some financial staff in house or are in consolidation phase but require FD input to streamline systems, provide regular management reporting and be on hand to guide you on all financial matters.

Comfort FD – This option is for those business owners who are comfortable with managing their financial function by and large, but require some oversight to provide comfort.

Your options in detail	Growth FD	Reliance FD	Comfort FD
The essential things you need to be compliant
Dedicated Financial Director contact
Overview and support to your internal finance staff
Health check on existing finance function systems & processes
Full management reporting
Unlimited email and telephone support
Implement suggestions from review to generate efficiencies
Cost control: Expense monitoring, analysis and advice Credit
control review and improvement
What-if analysis and financial projections to aid decision making
Cash flow forecasting set up and monitoring
Review of industry specific apps and implementation
Risk management
Dashboard to track relevant financial and non-financial KPI’s
Strategic planning to set goals and monitoring
Monthly accountability programme and support
Raising finance and investor reporting
Deep dive analysis of performance of profit & funding Non-exec FD role assumed for third party credibility
Perform a review of your credit control procedures and help you implement strategies to get cash into your account faster.
Monthly payment of our fees making it easier for you to budget

Note: the price of this service is fully deductible for tax purposes, which means that HMRC will refund you a portion of this cost subject to the rate of Corporation Tax you pay. Also note that there is no Employer’s National Insurance, as there would be for an employed FD (saving 13.8%)

Also, there is no minimum contract. If you are not getting value from the service, you can stop it at any time, giving you complete control and flexibility.

Your options in detail – how you benefit

For a small fixed monthly investment, you will benefit from the following:

Dedicated Financial Director contact

You get direct access to an experienced Financial Director that you can contact at any time, who will work closely with you. It will just be like having an FD on your team. This means you have one point of contact for all your queries. They will be supported by other members of our team, so you will always be able to get through to someone and receive a prompt reply.

Overview and support to your internal finance staff

It’s hard to manage staff – let alone staff that are engaged in an activity that is not your forte.

We will provide support to your in-house finance team for any queries they may have, so they don’t get frustrated and can be as productive and efficient as possible.

We can help you to hire and manage your finance team, or fill any skill gaps using an experienced member of our team.

Health check on existing finance function systems & processes

We will perform a health check on your existing finance function systems and processes to see where any inefficiencies exist, providing you with recommendations on improvements and help you to implement them, to save time and money. We can also analyse your business’s recent performance to help you understand what drives your profitability and cashflow.

Full management reporting

Real time management reports as to how your business is doing are crucial in helping you to make better timely business decisions. We will ensure that your finance function is set up to give you the reporting you need, as regularly as you need it, so you always have a pulse on how your business is performing. More importantly you get commentary and analysis accompanying your reports, along with regular meetings, to help you make sense of the numbers.

Unlimited email and telephone support

You can call upon your dedicated Finance Director contact at any time by email or phone without extra charge or worrying about the cost. If there is anything that is required outside the agreed the scope of services with you, we would always notify you in advance and provide a quote prior to proceeding. You will never receive a surprise bill from us.

Implement suggestions from review to generate efficiencies

We will work with you and your team to implement any suggestions that arise from our financial health check. This may include things like improving your payment procedures or invoicing processes through automation to free up time and reduce the risk of errors together with getting cash in faster. For example, we can help you automate the processing of all your purchase invoices and receipts so you don’t have to pay the cost of hiring someone to do this for you.

Cost control: Expense monitoring, analysis and advice

It’s very easy to lose control of costs when you are trying to grow a business. As you hire more people, you will have more employees making expense claims. It is important, but harder and more time consuming, to keep handle on costs and performance. You need to have processes in place that keep costs in check whilst alerting you to any anomalies to manage your risk.

Credit control review and improvement

Many businesses suffer from cash flow, often due to poor invoicing and cash collection procedures.

We will perform a review of your credit control procedures and help you implement strategies to get cash into your bank account faster. This might be through automating credit control, implementing direct debit or helping you to get payment up front.

What-if analysis and financial projections to aid decision making

You want to add a new hire to your team or invest in a product / service to help you take your business to the next level.

However, can you afford to it? What impact will it have on your financials? Are you taking all associated costs into account? We can help build projections to model the impact of these changes and the time it takes before your investment starts to bear fruit. We will explore different scenarios with you, based on ‘what-if’ questions, to help in your decision making and to manage risk.

Cash flow forecasting set up and monitoring

Cash is vital to the survival of any business. Monitoring cash flow is crucial in ensuring that you are to sustain the business during periods where income is low, or while you wait for your investments to bear fruit before your income grows. Too often, future liabilities such as PAYE, VAT and Corporation Tax are forgotten when trying to manage cash, this happens if you’re just looking at the bank balance.

We will help you build, monitor and update your cash flow forecast so it becomes a real live forecast, one that gives you clear visibility over future cash balance and requirements.

Review of industry specific apps and implementation

There are over a 1000 Apps in the cloud accounting eco-system, and more are added daily. We will research and recommend Apps that can integrate into your cloud accounting software and can generate efficiencies for you to save you time and money. Some of these may be industry specific to your business, others more generally around business processes.

Risk management

Managing risk is critical to ensuring business survival. We will identify the key financial risks in your business and assist you in mitigating these risks so you don’t lose money or reputation. For example, if you are onboarding a new customer and are concerned about their ability to pay, we can run a credit check on your behalf.

Dashboard to track relevant financial and non-financial KPI’s

Having a dashboard with your financial and non- financial KPI’s in one place and tracking them will help you and your team achieve your goals.
Looking at data in management reports is helpful. However, combining that with Key Performance Indicators (KPI’s), that are specific to helping you achieve your daily or weekly targets of your company is even more useful. Our motto is ‘anything that is watched and measured, improves’.

Strategic planning to set goals and monitoring

We will have a strategic planning session with you to understand your short, medium and long term goals and work with you to implement a series of targets, and help you craft a plan to help you work towards achieving them.

Monthly accountability programme and support

One of the keys to success is taking action.

You need to do the things necessary to move you towards your goals. Unfortunately this is harder than it sounds and the day to day running of a business often gets in the way.

Having an external person holding you accountable helps you to get the right things done. We will schedule a monthly video call or meeting with you, to help you work through your strategic action plan and provide help and support. This external support will make it much more likely you achieve your personal and business goals.

Raising finance and investor reporting

Depending on your growth plans you may need to raise finance or restructure existing finance. We will make representations on your behalf to our wide network of financiers to help you get the finance you need to sustain and grow your business.

Any financier will need management reports to ensure their investment is safe-guarded. We will work with you to ensure that these are provided as required to maintain your credibility and credit line.

Exit strategy development and formulation

If you are looking to scale your business and targeting an exit strategy, you need a plan to ensure you get maximum value for the time, money and energy you put into building your business.

We help you to keep an eye on the value of your business, so you know you’re on track, and exactly when you’ve reached your target. This means you won’t have to work any longer than you need to, being able to sell up sooner than you expected.

We will work with you to develop an exit strategy that maximises value. This could include looking at options such as MBO’s and looking at tying in key employees via tax-efficient employee share option schemes.

These options are very tax efficient and important, because you will not want to pay more tax than you need to, especially if there is a lot of money involved.

Non-Exec FD role assumed for third party credibility

If you are accountable to other shareholders or investors, or have taken on risk finance, you may be required to have a Non-Exec FD on board. We can perform that role for no extra cost within this package, to give you the credibility required and comfort to your financiers.

Your Modern Finance Department

Managing a finance function these days is no mean feat. However technology has come a long way in automating many of the processes that used to be carried out by employed staff. Reviewing how you manage your finance function can save you time and potentially a lot of money. It is important to choose good cloud accounting software.

A typical finance function set-up can be connecting together various App add-ons that help to automate and drive efficiencies.