The role of an SME Financial Director

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[cs_content][cs_section parallax=”false” separator_top_type=”none” separator_top_height=”50px” separator_top_angle_point=”50″ separator_bottom_type=”none” separator_bottom_height=”50px” separator_bottom_angle_point=”50″ style=”margin: 0px;padding: 0px;”][cs_row inner_container=”false” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”4/5″ style=”padding: 0px;”][cs_text]Financial directors are ultimately responsible for all financial decisions of a business, but the role demands more than that; it requires a robust working knowledge of all four corners of the business operationally.

FDs need to operate both strategically, assessing a business’ opportunities and threats, mitigating commercial risks and planning the direction of future growth in market share and profitability; and operationally, managing the business’ cash flow, working capital, systems, processes and reporting. SMEs often require the FD to take on the roles of both Finance Director and Financial Controller .

SME Financial Directors need a broad commercial skill set and need to be “hands-on”.

What’s involved?

Finance underpins all areas of a business, including operations, HR, payroll, corporate governance and IT systems.

The SME FD therefore needs a thorough working knowledge of areas including those examples outlined below:

  • Financing the business –working capital and CAPEX requirements, cash flow planning, invoice or asset financing, organic growth and M&A planning, balance sheet gearing (debt to equity ratio).
  • HR – employment pay rates, minimum wage, pension auto-enrolment and RTI requirements, Agency Work Regulations (AWR), TUPE regulations.
  • Commercial risks – current affairs and macroeconomics can have a significant impact on a business’ finances, e.g. US dollar and Euro currencies have fallen by 16% and 10% respectively since last year’s referendum. CPI forecasts for UK growth forecast in 2017 range broadly from 1% to 2.8% This in turn can impact import, export, currency forward-buying and hedging decisions.
  •  IT – cyber security and data integrity is critical to businesses. The SME FD must understand the business’ IT architecture, its software and licensing requirements and, fundamentally, plan for future growth and expansion of transactional and reporting requirements.
  • Corporate governance – e.g. The FD must ensure full compliance with Corporate Manslaughter, Bribery Act and Money Laundering legislation

Additionally, there may be additional industry specific legislation to consider e.g. Construction Industry Scheme (CIS), Gangmasters Licensing Authority (GLA).

Finally, an SME FD may be expected to plan and lead process improvement and change management initiatives, Lean six sigma projects and ongoing training requirements for all relevant staff.

To summarise, the SME FD role can be demanding but is an exciting, all-encompassing and hugely fulfilling commercial role.[/cs_text][/cs_column][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/5″ style=”padding: 0px;”][x_image type=”none” src=”” alt=”” link=”false” href=”#” title=”” target=”” info=”none” info_place=”top” info_trigger=”hover” info_content=””][cs_text]Lee Woodward FCA
An experienced,
hands-on FD in East Lancashire


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