Who do you need in your Finance Department?

“We’ve got an accountant” says one business owner when asked if they have considered a Finance Director.

“Can we stop using our accountants?” says another when asked the same.

There are plenty of roles to consider in the Finance Department: FM, FC, Management Accountant,
Bookkeeper, FD, CFO…. but do you understand who does what and, more importantly, who
shouldn’t be doing what?

Every business needs an accountant – someone to collate the end of year compliance docs and
submit to the authorities. It may be necessary, but just how helpful is this to the running of the
business? By their very nature, end of year accounts are completed (please excuse the obvious) after
the financial year has finished – 9 months afterwards to be precise.

So, you get to fully understand how well, or badly, the business has performed up to 21 months after
the period began. Chocolate teapots spring to mind when considering the fast-paced SME world.
This is where FDs come in.

Accountants look backwards, Finance Directors look forwards. It’s that simple.
“If we carry on as we are, things aren’t looking too great. This is what I suggest we do to improve

Sounds a bit more useful than historic accounts, doesn’t it?

I talk to many businesses that have someone with the title FD. More often than not, they are full
time employees who spend most of their days dealing with the purchase and sales ledger, paying
suppliers, sending out invoices and chasing in money. Totally essential of course, but very little to do
with directing the business. A true FD should be as skilled as the MD / CEO, but with a financial slant,
using the data created by the finance team, to set the course for financial security. Think of the
business journey in terms of the sat-nav in your car. The FD identifies the route and destination,
adapting as the journey progresses, whilst the rest of the Finance Department spend most of their
time behind the wheel, following the FD’s directions.

Which leads us to a big question: do you need a full time FD? I argue that FD level decisions are not
an everyday occurrence, but the role of the FC probably is.

Senior FDs command high salaries, often costing the business more than £13,000 per month.
An outsourced part-time FD costs on average £2,500 per month. A full time FC, £3,000 – £4,000.

You do the maths.

David Seaton
Managing Partner