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The finance function in a small business is responsible for cash management, the production of management accounts and preparation for annual statutory accounts.
As the business develops and grows, most business owners and stakeholders look for more from the department, particularly in the areas of forward planning, commercial input and strategic expertise. This is when a senior finance person is considered.
A finance director might be considered for this but because this is a new cost, the budget may only allow for a less experienced full time finance director. The dilemma here is that this FD will have experience of accounts preparation and cash management but will be unable to provide the forward looking planning and strategic requirement of the leadership. They will come with a very solid grounding in producing management accounts and do a good job in making the finance function operate well, but they are unlikely to have much experience from a strategic and commercial perspective.
Most small businesses need a combination of a well-run finance function and a small amount of high quality, strategic and commercial support.
A solution to this dilemma is a highly experienced and senior finance director on a part time engagement, combined with a junior finance person. The junior finance person is supervised by the senior part time finance director, which keeps the cost low, but they provide just the right amount of commercial and strategic support the business needs, typically a few days per month, keeping this cost manageable also. This combination means the business gets the best of both worlds and manages the cost.
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