Firstly, what is a Cyber CFO (Chief Financial Officer) or a Virtual FD (Finance Director)? And why do I need one? Well, it’s simple really – no one can do everything! The role of a virtual FD is to give high level financial back up to your ever growing business. A Virtual FD can be a short or long term project that gives you all the benefits of an FD without the costs of employing one. A bit like a pay as you go service.

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Most businesses will say they don’t need one….. Until things begin to go wrong…. By then it’s almost too late. Cash flow is down, debtors are high and the banks won’t lend. No one can be a master of everything – you are running your business because it’s what you are good at and it’s your passion.

 

Accountants are looking after people’s accounts and financial decisions because it’s their passion.

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Virtual FD services are becoming more and more common and businesses are engaging such services in order to help them grow and thrive in our ever changing economy. Fairman Harris were recently engaged to provide virtual FD services to a start up Tech Company, specifically to enable them to attract funding through SEIS/EIS (providing tax breaks to investors). This enabled the key decision makers to focus on the development of their product, in preparation for a market launch. It’s about creating an enabling environment in which you focus on what you’re best at.

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Many people ask why they need this when they have a bookkeeper and an accountant. But the very basis of the role of an FD/CFO is the ongoing monitoring of the financial health of a company and making sure it’s placed to grow. How? Well, firstly most business fail to use the best information they have to help them grow. Previous customer information. Consider a scenario where you have a business Dashboard that tells you how quickly your customers pay you? What incentivises them to pay faster? How much an average customer spends? By analysing your data, you can make the right business decisions.

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Fair enough you may say, we are growing, we need an FC (financial controller) …. Someone to keep an eye on things and manage our bookkeeper(s). Is this enough though? Virtual FD’s are an asset to businesses predominantly because they have experience of hundreds of companies other than yours. They are seeing all types of businesses and helping them grow and flourish. They are not just looking at the day to day bookkeeping and banking but they are looking at cash flow for the future.

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There are many accountants out there, qualified and not but the key to finding a successful FD is their actual experience. The advantage of a virtual FD is accessing high level expertise and only having to pay for it when you need it.  Hence keeping the extra pennies in your pocket.

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Finding the right FD for your business lies in the experience they have in businesses like yours – there is little value in getting an FD on board who has worked with PLC’s if you are a small company and similarly the other way around. You need someone that can understand your customer base and the products and services that you provide. If you are looking to list in the future or register with the FCA you need someone with experience in this. If you are not for profit or a charity look for a Virtual FD who has worked in this sector and understands the limitations.

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If you are considering hiring a Virtual FD come and talk to one of our experienced partners for an honest chat on whether your business could afford one, should afford one and would benefit from the service.

 

Fahreen Meghani

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