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How part-time FDs harness tech to create value

Part-time FDs are able to play a crucial role in start-ups and SMEs in 2019, say Sanjay Patel and Janine Middleton of The FD Centre.

From working capital allocation to employee expenses and everything in between, finance directors’ reputations as ‘number crunchers’ have long been overshadowed by a more fitting prestige; as an integral cog to a range of departments.

The old myth that finance departments smother new ideas is quickly being debunked, and with enviable analytical skills, an enabled FD will find innovative ways to reduce cash inefficiencies and aid in strategic decision-making.

In this context, part-time FDs are expected to play a crucial role in start-ups and SMEs in 2019.

How can my business benefit from hiring a part-time FD?

The role of the FD within start-ups and SMEs is changing. Unlike more mature businesses, start-ups and SMEs will have greater focus on areas such as fundraising and debt solutions to finance the business in the kick-off and growth phase.

This is where contracted FDs can provide a wealth of understanding in many areas of the business, and cover a corporate finance element. They offer knowledge in more technical areas that entrepreneurs and young business owners might never have come across or don’t have the time or appetite to address.

Part-time FDs provide a cost-effective solution for businesses that do require the input of a skilled Director but can’t afford the full-time fees. It adds great value to the management team and often stops businesses from making bad decisions in the early stages by having a good handle on their finances and strategy.

The presence of an outside source on the team can also alleviate conflicts of interest that can typically be subconsciously held by full-time employees. This allows the ability to tell the owner or manager the truth about the business.

What are the key areas that a company can tackle with FinTech?

Technology can drive a combination of faster growth and greater efficiency within start-ups and SMEs, and should therefore be a huge ally for any part-time FD. By utilising it correctly within businesses management, information is naturally enhanced, allowing FDs to focus on strategic decision-making rather than getting stuck with operational tasks.

Any solution that will allow cash to flow into the business more efficiently and enhance the sales process is key. The key area to tackle first with FinTech would have to be understanding and using customer data to drive decision making.

With so many FinTech offerings in the UK today, it is often challenging to evaluate the many solutions. The first step would be to speak to industry experts to understand the ideal solutions.

Cost will play a huge role in the systems and solutions chosen. Probably the biggest challenge FDs face when implementing such improvements, is ensuring that there is sufficient cash available to do so. It is often a very expensive process in the short-term with sights to achieve long-term gain.

How can my company retain control and visibility on expenses whilst retaining productivity?

London FinTech Soldo recently commissioned YouGov to speak with 4,000 companies, in order to identify the trouble points in the cash flow cycle across business functions. The research revealed that the most important concern for FDs in 2018 was managing their company spend.

It also revealed the headache of unreconciled and badly reported company spending – 36% of finance directors said they spent an unnecessary time every month doing financial detective work to find out who spent what.

Over a fifth (22%) of businesses also admitted they were willing to leave a percentage of company spending unreconciled at the end of each month, subsequently creating an administrative nightmare at each financial year end.

Management information remains at the heart of the success of any business, unless you can see what you have done and what you expect to do there is no way you can steer a business in the right direction.

A strong finance team, attention to detail and good enterprise resource planning (ERP) and accounting systems will ensure good data in good data out.

Budgets and forecast are key and should be the responsibility of the finance team so that the sales team can focus on sales. Variance reporting etc in management accounts will always highlight issues with the costs of a business at the early stages and that’s what the FD is there for.

What advice would you give to a part-time FD who has just started working with a company?

  1. Ensure the finance dept is centrally place and seen as a supportive dept allowing for the operational areas of the business to achieve their goals.
  2. Understand where and what are the value levers of the business that typically give you the advantage against your competitors.
  3. Identify the areas of the business that needs to be addressed immediately to improve profitability.
  4. Make sure there is good quality management information to understand the health of the business.
  5. Buy into the concept of the business and build strong relationships with your management team.


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