10 Reasons to Consider Hiring a Portfolio Finance Director

The concept of hiring a part-time portfolio Finance Director is a new one to some business owners who may not be familiar with the term or don't know how one might benefit their business. In the latest issue of Northern Insight Magazine, Bob Evans, a portfolio FD at Kingsmere Finance Directors, shares his top 10 ways a portfolio FD can add value to your business.

1. Enhanced Decision Making

By basing key business decisions on relevant and accurate financial information a business owner can avoid costly mistakes and reduce the risk of loss. These decisions include around financing the business, expansion, or downsizing, whether to enter a new market or produce a new product.

2. Better Financial Information

Producing accurate and timely financial statements, management reports, projections, forecasts, budgets, and cost models that are all based in economic reality. These tools enhance insight and promote proactive management. By identifying the levers that drive performance they can be calibrated to maximise efficiency, lower costs and optimise profit and cash flow.

3. Improved Internal Controls

Appropriate financial controls can provide many benefits including accurate financial statements, improved control of company assets and reduced risk of fraud.

4. Tailored Flexibility

With a portfolio FD, support levels can be varied and customised to the evolving needs of the business, tailoring the FD’s time accordingly. Increased support can be dialled up at critical times, reverting to a more consistent level when appropriate.

5. Cost-Effective Expertise

A portfolio FD can bring all the benefits in terms of experience, skills and knowledge of a full-time resource, at significantly less cost.

6. On-Site Support

Services can be provided on-site which is convenient for meetings and to perform critical work. The FD becomes embedded and acts as part of the management team. When not on-site, the FD can be ‘virtually’ available through video conferencing platforms, such as Zoom, Teams or Slack.

7. Specialist Skillset

A properly qualified FD is a business professional with relevant experience across a range of commercial environments. This important distinction between a career FD and a company’s accountant is key. With their experience, the FD can swiftly identify and solve many financial and business problems, employing best practices and techniques.

8. Increased Productivity

Hiring an FD to deal with the financial and administrative functions, frees up the business owner or management team, enabling them to focus on other value-enhancing aspects of the business. In addition to bringing financial and accounting expertise – an FD can deal with areas such as human resources, facilities, insurance, legal and compliance, as well as stakeholder relations.

9. Greater Perspective to Empower Entrepreneurship

An FD can improve the decision-making process by bringing facts, and solid numbers, and asking the right questions. They bring fresh perspective and insights to the business owner, in turn making life a little less lonely for the entrepreneur. A portfolio FD can be a sounding board and trusted advisor for new ideas and initiatives.

10. Stakeholder Confidence

Stakeholders such as investors, lenders, and creditors react positively knowing that a business has had the foresight to have a professional FD on board. This added confidence helps when looking for outside investment, debt financing, or positioning the business for sale.

Perhaps the biggest benefit, however, is how the business owner or management team can transfer their financial and administrative burden to the FD, freeing them to work on other critical aspects of the business.