Hiring an outsourced finance director

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Phil Wright - Menzies Accountant

Phil Wright – Director

Hiring a full time Finance Director (FD) can be a huge financial commitment for your business and in recent years there has been a notable rise in the number part-time FDs, and outsourcing in general.

Having a dedicated inhouse FD can add significant value to a business by becoming the link between the finance team and the business owner/management team’s aspirations. But if you’re still to commit to bringing on an FD, how do you know if a part-time or full-time recruitment is the right thing to do.

There are a number of points to consider.


Reason for an outsourced FD

Is the need project based, so in reality a short-term assignment? Are you sure there is a full-time role? If you’ve not had an FD in the business before, going from ‘no days’ to ‘5 days a week’ seems a large jump to commit to, so could a part time agreement be enough in the short term?

Costs of an outsourcing FD

A part-time FD will come in at a higher hourly charge rate, but will only undertake the work you need them to do; you aren’t making a commitment to have someone in your office 5 days per week which comes with the associated National Insurance, Pension and any benefits package contributions. Your pro-rata cost will be higher but that doesn’t matter as– you’re getting the support you need. Add to this that you’ve not had to pay any recruitment costs – which could be 20 – 25% of the first year’s salary – and in the long run you could be better off.

FD Skills

You can get some excellent full time FD’s and some excellent part time FD’s, but as with the recruitment for any position, you need to consider whether the candidates not only meet the core skills requirements but also more importantly the necessary commercial experience so as to add the expected value to the business. Having an FD who can access skills and support from a back office of tax and accounting specialists is very appealing.

Flexibility

Having a member of the team who doesn’t come with the commitment and entitlement of employment, and can be brought in on particular projects (this could include key reporting timetables) is great.


Menzies Outsourced FD services

On balance, we’ve found that for many SME businesses our flexible ‘part-time FD’ route can complement their business in a number of ways:

  1. Where we perform a back-office accounting function, with monthly support a board level provides a very cost-effective blended rate.
  2. Where we perform ongoing monthly support to a client, with no end date. A continued review of rolling actions and managing the finance function.
  3. Where the client is in a transition period from not having an FD, and there is visibility in the future this might be needed – it’s a good first step.
  4. Where there is a need to bridge a gap in the finance function for a short period of time. This could be between one member of staff leaving and one joining. In this role we can provide a handover to the new employee that never would have happened.

An example of our FD Services in action

Good business succession planning is based on strong communication

Following the announcement its Finance Director was leaving, with a very short notice period. Menzies quickly met with the Managing Director of a manufacturing business to undertake a full handover. Over the coming weeks, Menzies managed the finance department making sure group reporting requirements were met along with supporting a team of three. We undertook periodic visits, were available for email and telephone support and had remote access to the client’s system to be as responsive as possible.

Working collaboratively with the Managing Director we also scoped the requirements of a suitable replacement based on our experiences of working in the client environment, its culture and understanding the best fit for skills. This insight helped shape the type of candidates we were looking for and gave a great dual perspective.

Using Menzies People Solutions team the recruitment process began in earnest to ensure the right mix of soft and technical requirements were found. Following the successful appointment, we provided a handover period and support to the new Finance Manager through the year end and group audit process, which started on their first day in post!

We have continued our support of the new Finance Manager working with them to improve the monthly reporting package and providing recommendations to upgrade the company’s individual and consolidated cash flow forecasts.


Chat through your FD options

If you are unsure whether a part-time FD is right for you, or whether you actually need an FD at all, please do get in touch. If you need any help with a Finance Function Review, we’re happy to chat through your business issues so please get in touch.