This is a question we often find clients asking. For many business founders and entrepreneurs the step of recruiting a senior non customer facing individual represents a huge move. Our advice is almost always to get on; take the plunge and make that investment. Looking at the key objections that are often raised:
Why do I need a score keeper?
Any finance function has a role to play in reporting the past and in identifying areas for improvement. That said the best FDs are much more proactive in looking at the underlying drivers of business performance. A subtle change to payment terms or a suggestion around a different method of staff reward can very often deliver tangible cash or profit improvements. This is about the production of quality, timely data – the core skills of a good FD.
I have a perfectly good external accountant?
Very often founders build longstanding and deep relationships with their external advisors. These should not be denigrated at all. That said, an external accountant is just that and is managing his own portfolio of clients. He can never be as close to the real drivers of the business on a day to day basis.
I would rather invest in my sales or operations function
This one is the acid test and very often toughest to overcome. How does one really quantify the financial benefits a good finance director brings. We would urge sceptics to talk to those clients we have helped through transactions on both the disposal and fund raising sides. Without exception they would be able to quantify in real value terms what their FD bought.
I have a simple business – what would a finance director do all day?
Another totally fair and reasonable question. The best FDs can find their way into most commercial aspects of a business. It might be they help more with funding or acquisitions related work or equally many FDs find themselves also overseeing IT or personnel – in truth a good FD should be able to work across a number of functions.
The best finance directors we work with are genuine partners to their CEOs. Their skills are in looking at complex data; analysing trends and making genuine improvements to the businesses they work in. When it comes to raising finance and dealing with funding institutions then an FD is simply a prerequisite. Our advice to clients is simple take that leap and make an FD a key part of your executive team.