If your company has so far weathered the Covid-19 storm, you now need to ensure its business survival over the coming months, especially as the Government’s furlough scheme ends and Brexit comes into effect.
But how can you do that?
One sure-fire way to protect and keep your company afloat is to use the services of a virtual Finance Director (FD) on a project by project basis.
Outsourcing and using virtual consultants make sense in the ‘new normal’ world of business—no need for face-to-face meetings.
Your part-time FD will provide you and your Senior Management Team (SMT) with the finance information and expertise you need to navigate through these turbulent times.
How A Part-Time FD Will Help Your Company to Survive
Typically, a part-time FD is a senior-level finance professional with large business experience. That means he or she brings expertise and knowledge to help you and your SMT find solutions to resolve the company’s most pressing problems.
He or she has done the same on a much bigger scale for some of the UK’s leading companies.
Find Solutions To Your Biggest Problem
In the short-term, your part-time FD will help you to address and resolve the company’s biggest challenge.
Let’s say right now your company is, like so many UK companies, struggling with negative cash flow.
With the massive drop in spending because of the pandemic and the public health measures that were put in place to contain the virus’ spread, many UK companies saw a fall in turnover.
The Bank estimates companies could face a total cash flow deficit of £140 billion. Some economists have said that’s an optimistic figure.
So, your cash flow is likely to be the biggest challenge your company is facing right now. A part-time FD will help you by analysing your company’s finances and identifying ways you can immediately boost cash flow and cut expenses.
While you and your part-time FD consider the big picture, the rest of your finance team can do what they do best and ensure the company’s day-to-day processes and finance function are taken care of.
Your part-time FD can also work with your bank or other finance providers to help you find short-term and long-term funding solutions.
Having a part-time FD on your side can help to enhance your credibility with external stakeholders and reassure investors or lenders that the company management is focused on growing the business and their funds will be safe.
You might think that it’s enough to employ a bookkeeper or accountant. Why would you need a part-time FD as well? Aren’t FDs ‘just glorified accountants’?
An FD will do so much more for your company than a bookkeeper or accountant ever can. He or she will play both operational and strategic roles in the business.
A part-time FD is a more affordable option than employing a full-time FD for most SMEs. This way, you avoid recruitment fees and the additional high salary cost while at the same time getting access to someone with a solid background in finance.
Besides, if your company is like most SMEs, you won’t need more than a few hours’ attention a week from a part-time FD.
Once your company’s most pressing problems are resolved or at least under control, your part-time FD can help you to plan for a profitable future and exit.
The part-time FD will manage your company’s accounting and financial functions and work with you to create a financial strategy for its long-term profitability and growth.
The strategy might involve helping you and your team to establish robust systems and processes, so the company becomes more productive and more able to deal with the demands of scaling up in the future.
Your FD could identify business opportunities that are worth pursuing, such as an opportunity to acquire or merge with a similar company to yours or to buy an existing supplier or distributor to improve productivity and revenue. Or, he could identify openings in new markets or territories that will provide the company with new earnings and a buffer against external changes.
Or, she could examine the costs of sales to determine how much it costs the company to clinch a deal and hold onto existing customers. He or she might find opportunities to reduce the cost of acquiring new customers and retaining current clients.
He could investigate your supply chain to find out if it’s possible to negotiate better terms and even discounts from your suppliers.
So, he or she can help the company with identifying cost-saving opportunities and reducing overheads in a way that doesn’t hurt productivity and customer service.
She can help with managing capital, growing profit margins, boosting cash flow, monitoring KPIs and obtaining funding from external sources.
It will free you and your SMT from accounting and finance responsibilities to do what you do best—lead the company and identify better revenue-generating activities.
Your part-time FD will also provide you with an independent sounding board, something many business owners and CEOs feel they lack.
The FD will offer objective opinions and feedback based on financial and commercial information about the business rather than ones based on interdepartmental politics, as is so often the case within companies.
These are just some of the ways that a virtual part-time FD can help your company to survive the next 12 months and ensure it becomes a healthier, more profitable concern.