What is a Virtual Finance Director?

With Calathea Accounting

A Virtual Finance Director/Virtual FD, is a Finance Director that you hire for your business that you aren’t directly employing. A Virtual FD will typically work alongside the business owners with regular meetings and contact to gain insight in all areas of the business without being employed ‘in-house’.

Typically, when a business owner first starts running their own business, they take responsibility for as many tasks as possible with the aim of saving money. This is only sustainable for a certain period of time, as the business owner shouldn’t be heavily involved in the day to day running of their business.

If they are, then they usually won’t have any time or energy left to work on their business as all of their time and energy is taken up with working in their business.

The business owner should have the freedom and headspace to focus on bringing in revenue. This will then give them the time to gain clarity on the direction and journey that they wish their business to take, which will impact on their end goals and how they wish their ideal life to be.

When do you know if the time is right to hire a Virtual FD?

In reality, there’s never a wrong time. A Virtual FD will be the close advisor that your business needs to steer it in the direction of success. They will have experience in providing support to businesses many times over.

A Virtual FD will take responsibility for ensuring that the business has steady, sustainable growth and they do this in a number of ways.

Virtual FD Responsibilities

Typically, they will:

– Be responsible for the businesses cashflow management via a rolling cashflow forecast which is monitored regularly

– Undertake scenario planning to ensure the business is in a strong position

– Prepare an annual budget to plan ahead for the future

– Prepare monthly or quarterly management accounts and feedback to the business on its performance

– Regularly set objectives and goals with the business owner to ensure they are heading towards the life they want to lead

– Attend board meetings to gain a deeper insight on the business and be a sounding board for new ideas and any challenges that the business is facing

– Regularly discuss the businesses performance to keep all employees on track with the business’s goals

– Do a review of the systems that the business uses and the processes that you have in place. This will highlight areas that need improvement and alignment

– Complete a review of the businesses overall position before a finance or investment decision is made

– Have a good professional support network alongside them to ensure they are able to signpost the business to other professional services that might be needed i.e. for specialist financial/investment advice or HR support

Cost Savings

Robert Half, Recruitment Advisors, are reporting that an employed ‘in-house’ Finance Director’s salary in London can range from between £104,500 – £232,200 at the moment due to the lack of highly skilled staff in this area.

Bringing in a Virtual FD to your own business will be considerably less than this so the cost saving will be huge.