When is it a Good Time to appoint a Virtual Part Time Financial Director?

When is it a good time to appoint a Virtual Financial Director?

The easy answer maybe 'When you start your business.' However, a reality check needs to be taken. Funds may not be available to pay for the service or indeed there may be insufficient workload to justify such an appointment.

Although it may be a condition of a third party investor that a FD be appointed by the business, even in these circumstances the Finance Director may only be part time.

So it is most common for businesses to grow (or contract) until a point is reached when the missing skill set that a part time finance director should possess is required to safeguard the future.

What are these situations that may trigger the appointment of a part time finance director?

There may be many but typically any list would include:
- The owner losing control of the business – not knowing how the business is performing – no management accounts – no cash management
- Rapid business growth without a senior financial professional to assist in setting a robust strategy and plan for the future
- Businesses that absorb all available cash with increases in working capital potentially restricting growth and capital expenditure.
- Established businesses with poor profitability and/or with an unacceptable cash generative history.
- Businesses facing external pressures to make financial improvements to satisfy personal or corporate commitments from banks or investors.
- Business owners that plan to exit and seek help to maximize the business value.

Business owners should, whenever possible, be proactive in the appointment of a part time FD; see the appointment as part of the strategeic development of the business and for it not to be a reactionary move dictated by problems within the organisation.

Whatever the circumstances in your business if you need more information on the appointment of a part-time finance director contact DAW Consulting for an informal discussion.