We’re always excited when a company owner tells us it’s time to take on a Finance Director.
They’ve realised they need to professionalise their finance department, to pave the way for serious financial growth.
We tell them that we’re going to implement the ‘Financial pyramid’:
As I explained in my last blog, mature finance departments have three layers:
- Bookkeepers to record transactions and produce basic figures…
- Accountants to do reporting and analysis of these figures…
- A finance director to help the business owner make good financial decisions for the future.
But just occasionally, it becomes clear that company owner has the wrong end of the stick…
When we ask about the quality of their accountant or bookkeeper, they say: “Well, can’t the FD do some of that work?”
They think that the FD can pick up some of the slack for their under-performing accountant or bookkeeper. Or even worse, they think they can get away without a bookkeeper or accountant at all, once they have an FD in place.
There’s usually one sentence I say which brings them back to their senses…
“Congratulations, you’ve just hired the world’s most expensive book-keeper.”
The point is, an FD isn’t just a very fast and efficient accountant or bookkeeper, who can dip in and out of those jobs when it suits you!
These are separate roles. You need all three of them done properly, by the right people, in order for your finance department to function smoothly.
For example, the accountant needs the numbers produced by the bookkeeper, to provide you with financial analysis…
And your FD needs that analysis to help you make financially sound plans for the future of your business.
Getting your FD to do your bookkeeping is like asking an army general to do guard duty every evening instead of planning your next military offensive. They’re both vital to your army’s success. And sure, the general might be an extremely experienced and efficient look-out.
But assigning the general to guard duty is silly, isn’t it? This mismanagement of resources will cost you dear.
Here at Insight Associates, we do occasionally help companies by providing a Finance Director when you want to keep your in-house bookkeepers and accountants.
But that is only a possibility when your people are already performing to a very high standard, and you simply need someone at the top of the pyramid to provide more financial guidance and planning.
More typically, we provide the entire pyramid, implementing into your business a finance department that is structured to help you grow faster and more smoothly.
Sometimes you’ll still have someone in-house you want to keep on and that’s fine! But the bulk of the people, processes and technological know-how come from our very, very experienced team of bookkeepers, accountants and finance directors. And they get it all running for you within weeks.
So if you’re ready for a world-class finance department that is designed to maximise your growth and your profit, please get in touch today.
Simply reply to this blog or call us on 01279 647 447 for a no-obligation chat about your needs – and how we can help you.
Warmly,
Garry
