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Discover leading insights from our finance experts at The Finance People. Use this financial advice to enhance your strategy, to overcome common financial challenges within SMEs, or to better understand key areas of finance for business. 

What does a Financial Director do?

A Finance Director is a core member of your business team, but what is a Finance Director, what do they do and do you need one in your growing company? In this blog we will define this crucial role and explore the responsibilities of the role.

Small business succeeding during recession
The Finance People offer flexbile and affordable Financial Director solutions.

What is a Financial Director?

A Financial Director (FD), also known as a CFO in the USA, is a member of staff who takes the lead of the finance team within a business. A Finance Director reports to the board or CEO of a business and are an integral part of the business as they provide strategic advice to help a business achieve their goals.

An FD differs from other roles within your finance department. A Financial Director has more responsibility than other staff members, such as the Finance Manager or Financial Controller, and the feedback and strategy that the FD provides will be invaluable to the growth and evolution of a business.

What does a Financial Director do?

A FD is responsible for managing a businesses financial strategy to encourage the growth of the company. A Financial Director's responsibilities will vary depending on the industry you are in and the requirements of your business, but here we list some of the responsibilities you can expect your FD to take on.

One of the main tasks that your dedicated Financial Director will undertake will be to develop and implement financial strategies for your business. The benefit of a FD over another member of financial staff is that they are able to offer strategic thinking to create strategies to help your business grow. Additionally, your Financial Director will prepare financial reports and statements, to ensure proper management information. The benefit of management information, is that by fully understanding where your business has been you can be in a better position to make plans for the future.

In order for a business to survive they need cash and that is why you can expect your Financial Director to manage budgets and cash flow for your business. Cash flow management is crucial to the success of a business, as the process allows you to forecast profit and losses to help avoid cash flow issues in the future, as well as providing an opportunity to see investment potential. As well as cash flow, a FD will analyse financial data and present insights to the business directors or CEO. These insights will assist you as a business owner with making informed choices for the future of your business.

Crucially, a Finance Director will ensure compliance with financial regulations and laws, ensuring this is all done properly will minimise risk to your business. As well as compliance risks, your FD will identify and mitigate all risks within your business. From finance risks to reputational risks, your Financial Director will take the time to discover the risks posed to your business, so that a plan can be made to minimise, mitigate or manage the impact.

Day to day, a Financial Director will oversee financial operations and activities, as well as optimising financial performance to ensure long-term financial stability. They will also represent your business in financial negotiations, whether that be with suppliers, banks or investors.

5 signs you need a Financial Director

Is it time to to bring a finance director on board? Here are the signs to look out for if you're unsure whether you need a finance director in your business.

  1. If you have budget or investment but are unsure where to allocate it, a finance director can provide valuable insights and guidance. ,

  2. If your business is experiencing growth and driving demand, a finance director can help ensure that profits are being maximised and reinvested appropriately.

  3. If you want to improve your cash flow management, a finance director can help you create and implement strategies to optimise your cash flow.

  4. If data management is becoming too difficult and complicated, a finance director can help you streamline your financial data and provide meaningful analysis.

  5. If you have outlined your business objectives and guidance, a finance director can help you achieve these goals by aligning your financial strategies with your overall business strategy.

Discover more about the five signs here.

Hire a part-time Financial Director

A Finance Director is essential to the success of a business, but not all start-ups and SMEs have the means to recruit one full-time. The Finance People are able to provide a flexible and affordable solution for these businesses, with finance experts available on a part-time basis. With no sick pay, no lengthy tie-in, no maternity cover and more benefits - working with our part-time FDs can help your business scale, without the costs associated with a full-time expert.

A part-time FD will complete the same tasks as discussed above, but offer the perfect solution for businesses who do not require full-time assistance or are not able to invest in full-time FD. We offer a no-obligation consultation to discuss your business requirements, to see how we can best help you in growing your business. Get in touch to find out more!

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