non exec fd’s

The importance of a financial director role

Whilst not all businesses will be at the point of turnover that warrants the appointment of an in-house Financial Director (FD), however if your business is growing rapidly, and you want to achieve sustainable structured growth, then you should consider the option of outsourcing the role of an FD to an experienced and qualified accountant. Alongside the Managing Director and fellow directors or investors, the role of the Financial Director is a complex yet vital part of any successful SME or family business. Rather than just managing adherence to the financial and tax obligations of a firm, which should be carried out by a suitably qualified accountancy practice, a key part of the FD’s job should be to outline, implement and ensure the achievement of a business’s financial strategies as part of the overall goals. The role in part is to report to the other members of the board, providing timely financial information, and liaising with other parties such as shareholders and financial institutions. In addition to the external connections, the FD will provide a leadership role to employees in relation to many other aspects of the business. Examples of strategic and managerial tasks that the FD or outsourced consultant should implement or oversee include: • Offer guidance to the Managing Director when determining the corporate objectives of the business, regularly advising on the projected success or failure based on availability of finances for budgets. • Collating the financial strategy and departmental budgets for the business and the effects on the business goals. • Understanding, analysing and presenting regular reports on internal factors including turnover, profit, income targets, and productivity with comparison projections to results. • Analysing where there are or could be potential failings based on underachieving against projections, and suggesting solutions or alternative routes to success.

• Understanding, analysing and presenting regular reports on external factors such as financial trends, stock market movements, competitor activity, market opportunities and their potential effects on the business. • Working alongside other board or management members such as Logistics, Sales and Marketing and HR, for example in the recruitment, selection, training, motivation and promotion of financial staff. • Supervising the timely and accurate production of legislative requirements such as tax returns, audits, accounting procedures, and payroll. • Managing any company investments, dividends, and capital reserves. • Preparing tender documents and implementing purchasing practices. The FD may even have the responsibility for instructing company insurance, suppliers and import-export requirements. If they are a formal director of the company, in addition, they will be required to exercise the duties and responsibilities of a director. Regardless of whether you employ an in-house Financial Director or appoint the responsibility to a qualified and competent external consultant, the successful fulfilment of the duties outlined above will help to ensure achievement of your corporate goals, and ultimately see your business grow.

Les Leavitt

Leavitt Walmsley Associates Chartered Certified Accountants www.lwaltd.com