Why a Fractional FD could be just what your business needs

Running a business means making decisions all the live long day – How do we stay competitive? Can we afford another hire? Should we invest in new technologies? Is that new contract profitable? Why are we seeing an increase in sales and a reduction in the bank balance?

Yes, yes - You might have good accountant – someone keeping the books in order and ensuring that your tax and filings are compliant. Even still, you might find yourself wishing you had someone to sit down with, someone to work alongside you, someone to help make sense of the numbers and help you work out what to do next.

That’s where a fractional Finance Director comes in.

“Fractional” sounds way more complicated than it is. In essence, it just means that you’re paying for the expertise of an experienced FD for an agreed amount of time, for the amount of time you require them, without having the burden of having them on the payroll.

There are a number of reasons why this model can work well for you:

Experienced support, at a level that makes sense

Many growing businesses would benefit from an FD, but don’t have enough work to justify a full-time appointment.

A fractional FD gives you access to that experience for the time you need. That might mean regular support for a specific number of days each month, or more involvement while you’re working through a particularly busy period. You get to dial them up and down as you require – the PAYG FD!

You get someone who can look ahead, challenge your thinking and help you understand the financial impact of your decisions, with a cost that fits the scope of the work.

A clearer view of your cash

It’s hard to feel confident about the next few months when you’re constantly checking the bank account and keeping your fingers crossed there are no surprises!

A fractional FD can help you get a clearer picture of what’s coming in, what’s going out and where things might get tight. This then gives you time to act…chase in payments earlier, rethink the timing of a purchase or make mitigations for a quieter sales month before it becomes a headache.

And when you’re considering growth plans, like taking on more staff or bigger premises, you’ve got a forecast to help you see what the business can afford.

Someone to talk through the big decisions with

It can be lonely at the top - being a business owner can be a lonely job. Especially when everyone is looking to you for the answer.

Sometimes you need someone who will ask the questions that keep you awake at night… “Have we thought about what happens if that customer pays a month late?” or “How much profit are we actually making on this work?”

A good FD brings a fresh pair of eyes and a bit of constructive challenge. They can help you explore the options, check the assumptions and decide what makes sense for your business.

You still make the decisions. But sometimes it’s just helpful to have a bit more useful information and someone to work through it with.

Support that can change as you grow

What you need today might look quite different in six months.

Perhaps you’re hiring, taking on bigger customers or preparing for investment. Perhaps business has slowed down and you need to get a firmer grip on your cost base.

With a fractional arrangement, you can agree support around those changing needs. You can also work out what your finance function needs longer term before committing to a permanent appointment.

That time spent planning can be useful when the business is moving quickly.

Help getting those important jobs done

Most businesses have finance tasks that keep getting pushed down the list.

Better reporting, a more useful budget, fixing broken systems, working out which services make money... They all matter. But the month end reporting cycle and the other day to day challenges within the team tend to win out, and without slack built into the team’s resources, these tasks remain utopian.

A fractional FD can help with those priorities, moving these tasks forward, working with your existing team and bringing in specialist support where needed.

The aim is to make running the business easier: providing meaningful information, embedding processes that work and creating a road map that provides fewer surprises.

More confidence in what comes next

You don’t have to wait until something has gone wrong to bring in financial support.

Having someone regularly looking at cash, margins and plans can help you spot problems earlier and make better-informed decisions as you grow.

For plenty of business owners, the biggest benefit a fractional FD can bring is that of simply allowing them to feel more on top of things. Knowing where they stand, understanding their options and having someone they can pick up the phone to.

If that sounds useful, let’s have a chat.

At Insight FD, we can talk through where your business is now, what you’re trying to achieve and whether fractional FD support would be a good fit.