With all companies having a budget to work within, one of the biggest dilemmas business owners face is the decision on how much to invest in money management itself.
Business owners often like the idea of keeping as much of their financial management under one roof as they can, sometimes believing that this will form a centralised hub of money-minded employees who can be monitored and consulted at any time, perhaps headed by a financial director, or FD. They also tend to believe that they and other staff members should be able to simply absorb more responsibilities as their company grows.
The problem is that this is a drain on time and resources, especially if employees do not have the skills or qualifications needed for the tasks and costly mistakes ensue.
Realising roles
Not helping the situation is the fact that business owners frequently misunderstand what the role of an FD entails, perhaps confusing it with that of a financial controller or bookkeeper who deals with day-to-day transactions.
An FD doesn’t so much record and calculate the cashflow of a business, but rather investigates it, identifying trends, giving opinions and working closely with the managing director at all times. To some extent it’s an overseeing role, but it’s also a very hands-on position, and one in which knowledge-based input and planning is particularly valued.
A view from afar
For this reason, there is a strong argument that an FD is better placed outside of an office-based accounts team. This means that bookkeepers are able to get on with the crucial job of keeping the financial ins and outs accurate and up-to-date, but the task of interpreting the figures is left to an external financial expert.
Such an in-depth task is rarely one that needs to be completed on a day-to-day basis, and it’s more rewarding if an FD is able to review accounts over longer periods in order to establish patterns and identify persistent strengths and weaknesses. He or she can then make an appointment with the business owner at a convenient time to discuss the findings.
Looking outside of the box
As an alternative to having a financial director within your business at all times, why not consider outsourcing to management accountants? By easing the burden created by overloading yourself and your staff with the company’s financial workloads, using a service like Sollertia ensures that accounts are overseen by an expert team with the systems and personnel not present in many otherwise growing and fully geared up SMEs.