Should I be recruiting an FD?

Do I need a Finance Director? What other finance roles are there, and should I recruit or outsource?

As your business grows, the likelihood is that you will need some more structured financial management and advice; after all, you need to focus on the all-important role of running the business itself. You may decide you need strategic financial planning from a Finance Director or some operational support and management of your accounting function in the form of a Financial Controller.

Working out what support you need and how to get it can be tricky. Let’s take a look at some typical finance roles, what they entail, and how you can decide what’s right for your business.

Financial Director

Typically, a Financial Director works to correlate operational and financial data provided by the finance department so that business owners understand the financial impact of decisions in real time. But what does that actually mean in practice?

An FD focuses on analysing and improving the future performance of your financial model rather than dealing solely with historical data. While your accountant completes the financial and compliance basics, your FD is looking at cost models, spending, and financial strategy. When you hire an FD, they’ll help you save money, improve cash flow, and define your business model to lay the foundations for future growth.

The average salary for an FD in the UK (August 2022, Glassdoor) is £99,281, rising to £105,758 in London, so the investment is significant. It’s a senior-level hiring commitment that adds to your headcount, and you also need to work out whether you have enough high-level finance and accounting work to justify the cost. After all, there are more junior and cost-effective roles or solutions for more basic financial administration.

Typical FD activities include:

• Strategic financial planning
• Monitoring cash flow
• Designing management reports
• Developing banking relationships
• Negotiating contracts and investment opportunities
• Reporting to the Board

Financial Controller (FC)

Very often, businesses will have a Financial Controller (FC), who is the lead accountant within the business and looks after operational rather than strategic financial tasks. The role will vary depending on the size of the company, but broadly speaking, the FC will maintain and operate the books and records of the business, looking back at data already generated. Under the guidance of the Finance Director, a finance controller is responsible for maintaining standard operating procedures for all accounting and bookkeeping functions.

The difference between an FC and a company accountant is generally one of scale rather than scope, with FCs generally working in larger businesses where there is a team to support.

The average salary for an FC is £59,819 (Glassdoor, August 2022), rising to £68,892 in London.

Typical FC activities include:

• Day-to-day management of all financial operations
• Providing financial statements and reports
• Managing tax compliance
• Managing and supervising staff in the financial team
• Overseeing the management of debt collection and cash flow
• Developing operation plans and budgets

Payroll Manager/Assistant

A payroll manager is a finance and human resources professional who typically handles all aspects of preparing and distributing employees’ payments. This includes maintaining payroll records, calculating taxes, balancing payroll accounts, and overseeing other members of the payroll staff. Depending on the size of your business and the number of employees, payroll duties may be combined with other duties such as bookkeeping and general accounting tasks.

The average salary of a Payroll Manager is £40,108 and that of payroll administrators or assistants is £22,823 (Glassdoor, August 2022)

Typical Payroll duties include:

• Directing and managing payroll procedures, including management of payroll software
• Calculating and issuing payment by cash, cheque or electronic transfer
• Deducting tax and national insurance payments
• Processing holiday, sick and maternity pay and expenses
• Calculating overtime, shift payments and pay increases

Bookkeeper

The recording of financial transactions within your business is known as bookkeeping and includes records of purchasing, sales, receipts, and payments. Bookkeeping involves the day-to-day record-keeping aspect of financial accounting, including the preparation of documents for all transactions and events within the business. These records of financial transactions are then used to prepare company accounts.

The average salary in the UK for a Bookkeeper is £24,372 (Glassdoor, August 2022)

Organising financial keeping duties include:

• Monitoring Financial Transactions
• General Ledger Entry
• Accounts Receivable
• Accounts Payable
• Data Entry and use of accounting software
• Creating Financial Reports
• Bank Reconciliation
• Organising Financial Records and Tax returns

Other typical finance roles in UK businesses:

• Chief Financial Officer (CFO)
• Management Accountant
• Finance Manager
• Financial Analyst
• Accounts Clerk
• Accounts Receivable and Payable Specialist

It’s important to remember that businesses have a number of different ways of splitting financial management within their business. While the job roles above give a brief description of some of the typical roles and responsibilities, roles will very much depend on the size, stage, and structure of the company and are likely to evolve over time.

There is a large range of different roles and functions; it can be hard to know where to start. With so many different financial roles out there, often commanding high salaries, it’s worth taking the time to figure out what support you need and how to resource it.

What do I need?

What you and your business need depends not only on the turnover, company structure, number of employees, and transactional nature of your business but also on the current skill sets within the business, the potential growth, and your overall future plans. Often, especially in small or growing businesses, directors or senior team members take on some of the financial management tasks for the company when this is not always within their skillset.

As your business grows, the demands of an internal accounting function and the ability to recruit the right people can be challenging and costly. You may have junior staff to run the everyday financial administration, but no high-level input to help you make strategic decisions. With the range of financial tasks needing to be delivered and the associated salary costs, it’s difficult to find that support in one person or a small team, especially the higher-level support and direction from a Finance Director.

Could outsourcing be right?

Increasingly, businesses are choosing to outsource part or all of their accounting functions so they can focus on other aspects of the business while having the assurance that everyday financial and accounting tasks are taken care of, with the option of adding more senior-level support and reporting when needed.

Not only does this keep down recruitment and overhead costs, but outsourcing also offers many of the less tangible benefits, such as no holidays, no sick days, and, crucially, no training and personal development costs.

Outsourcing with Haggards Crowther

If you’d like to talk further about what accounting and financial management support your business needs and whether outsourcing all or part of this might work for you, contact the team at Haggards Crowther for a no-obligation chat.