Key roles & responsibilities of a finance director
There's often a little confusion surrounding the role of a financial director – especially because it's so easy to get this function mixed up with other financial and accounting roles.
In a previous blog I explained a little about the different types of accountant , but this time I want to focus on the part a financial director should play in your company's growth journey.
Key roles of a financial director
While your bookkeeper, accountant and financial controller keep an eye on day-to-day accounting functions, a financial director's role is much more of a strategic one.
Here are some of the key responsibilities they should be taking care of, whether they're in house, or outsourced (freelance):
- Support – the FD's role is to act as a 'right hand man/woman' to the MD or CEO, providing ongoing support and guidance to help ensure the company's plans are viable and in line with financial objectives.
- Strategy – with expertise in broader thinking, they analyse the data collated by other accounting staff in order to identify opportunities and create robust plans for improving core functions such as pricing, distribution, marketing and remuneration policies.
- Minimise risk – a financial director is also tasked with identifying risks and assessing any potential impact of industry or trading changes and fluctuations.
- Investment – whether investing in other areas of your organisation to encourage business growth or seeking investment from external sources, your FD will help you to maximise opportunities and ensure that you make informed decisions without taking unnecessary risks. They’ll help you to get the best value from any deal you make, in turn giving you a return on the investment you make into their fees or salary.
- Metrics and reporting – senior management need a clear view of what's happening across all business functions in order to ensure stability and longevity. An FD will drive identification of all the appropriate metrics and accurate reports needed at the outset before any business decisions are made, giving management both the broad overview and in-depth details needed to increase profitability and potential. A skilled FD will also be able to analyse and interpret the data to help simplify decision making for the management.
- Financial leadership – every department needs help to improve systems, procedures and policies. Your financial director provides leadership across all functions and departmental decisions, giving you the confidence that any changes or adjustments are based on concrete facts and not just a 'flight of fancy'. They'll also provide leadership to other members of your financial team, helping to develop their skills and ensure that information is being processed in the most effective and efficient way possible.
Ultimately, a financial director possesses skills across financial, commercial, strategic, analysis and planning matters, helping to bring all of these elements together so that you can make informed intelligent and factual business decisions.
If you’re an SME and feel that you could benefit from the support of a financial director, but don’t feel that your margins justify taking someone on internally, please feel free to give me a call and I’ll be happy to help you assess the level of support that will represent the best value to your business.
here is my previous blog on types of accountant