The COVID-19 pandemic has profoundly impacted virtually every business in the UK, leading many entrepreneurs to embrace the benefits of automation and digitisation.
New working methods and the development of cloud software, have made many businesses question the need for certain roles in house. By outsourcing or digitising these functions, businesses can secure a reliable source of quality work without incurring the high salaries typically associated with hiring full-time employees for these positions.
One job role that has seen a significant increase in virtual representation is that of the Finance Director (FD). FDs are typically highly compensated, and their importance to a business should not be underestimated.
These professionals offer customised strategic and financial guidance to ensure that a company’s financial obligations are fulfilled, and its finances are properly managed. This level of expertise and leadership can often be the deciding factor between success and failure for a business.
Who is a Virtual Finance Director (VFD) specifically?
VFDs are like conventional finance directors, except they are not employees and work remotely. A VFD provides the same critical financial advice and services as a traditional FD – but in a virtual or remote capacity. Many startups and SMEs acquire a VFD when their business grows, and they struggle to manage cash.
As a result of appointing a VFD, stakeholders can be confident that their business is in capable hands. This offers many benefits, including cost savings, increased flexibility, and access to a broader pool of experienced financial professionals.
Ultimately, the rise of the VFD is a testament to the continued evolution of the modern workplace and the growing importance of virtual financial services in today’s rapidly changing business environment.
What services does a VFD offer?
A VFD carries out all the duties of a typical FD remotely. A few VFD services include:
1. Customised financial strategy and advice
A VFD works with a business to develop and implement a tailored financial strategy that meets its specific needs and goals.
2. Budgeting and financial planning
A VFD provides expertise in budgeting and financial planning, helping a business owner make informed spending decisions and allocate resources effectively.
3. Financial analysis and reporting
A VFD analyses and reports on the company’s financial data, providing insights into performance and identifying areas for improvement.
4. Risk management
A VFD helps a business assess and manage financial risks, offering guidance on minimising exposure to financial threats.
5. Compliance
A VFD ensures that the company complies with relevant financial regulations and laws, protecting it from potential legal and financial consequences.
6. Cash flow management
A VFD helps a business owner manage their cash flow effectively, ensuring sufficient funds are available to meet critical obligations.
7. Investment advice
A VFD provides expert advice on investment opportunities and strategies, helping a business grow its assets and maximise returns. They also guide and support during mergers and/or acquisitions, ensuring that these complex projects are completed smoothly and effectively.
What are the benefits of VFD services?
You are now aware of the services offered by a VFD. But what about the advantages of utilising VFD services? Will hiring a VFD boost your profits? The answer is a resounding yes. A VFD can provide benefits that no other professional can. Here are the reasons why companies should consider hiring a VFD:
1. Time and money saved
Utilising the services of a VFD is significantly more cost-effective compared to hiring a full-time, in-house finance director. With a VFD, you can eliminate the costs associated with salaries, benefits, office space, bonuses, equipment, and other benefits typically provided to full-time staff members.
Additionally, you save valuable time as there is no need for a training period when hiring a VFD. They can start working as soon as you are ready, without the need to adjust to a new work environment.
In today’s fast-paced business world, time is of the essence. Hiring a Virtual Finance Director offers a cost and time-saving solution that can be particularly beneficial for growing and ambitious businesses.
2. Fresh business perspective
Having an in-house Finance Director can sometimes result in them becoming too entrenched in the company’s existing ways of thinking and solutions. This can limit their ability to think creatively and outside the box.
On the other hand, using the services of a Virtual Finance Director provides a unique and fresh perspective. They often can identify opportunities or potential threats before you or your team do, putting forth a valuable voice of objectivity.
3. Better outcomes
VFDs usually have experience working with a wide range of businesses. You may be facing a financial challenge for the first time, but they would have already dealt with and resolved similar issues in the past.
This level of expertise should not be overlooked. It may be tempting to hire a VFD solely based on their experience in your specific industry. However, this could limit the benefit of their diverse background and the unique problem-solving skills that come with working with various businesses.
4. Efficiency and flexibility
With a full-time, in-house Finance Director, you are limited in your ability to adjust the level of services they provide and their compensation. You cannot change their pay based on the amount of work they did in a given month for example.
However, when working with a Virtual Finance Director, you can adjust the level of services based on your needs. This allows you to increase or decrease the level of support as required.
This also gives you greater control over internal efficiency, streamlines cash flow, and enables you to plan more effectively, providing greater overall value for your business.
5. Experience and skills
It is understandable to be tempted to hire a Finance Director with experience working in a large corporation. But the cost, time, and complexity associated with that decision should not be underestimated.
By working with a VFD, you can access that level of expertise for a fraction of the cost. They bring diverse experiences and knowledge to the table, allowing you to easily tap into their expertise and guidance.
In essence, outsourcing the Finance Director role gives you access to a wider range of knowledge and expertise than hiring an in-house replacement would.
Over to you
Hiring a full-time Finance Director can be perceived as a daunting and costly task for startups and SMEs. However, with a Virtual Finance Director, these businesses can tap into a wealth of experience without incurring the expenses associated with an in-house employee. The benefits of VFD services are substantial and can help businesses of any stage to reach new heights.
At Birdfynn Accountants, we offer VFD services designed to elevate your business. Our VFDs take care of financial planning, risk management, and performance forecasting, enabling your company to grow and succeed.
Do not miss out on the opportunity to transform your business – contact us today to learn more about how we can help you achieve your goals.
