To answer the question, I think it’s important to answer the question in two parts. The Finance Director (FD) plays a key role in a business large or small and their ‘worth’ may be observed in
- strategic planning,
- commercial contribution
- operational performance.
Finance Directors come at a cost and some businesses may not need someone in a full-time position. Before making the commitment, it is important to understand the difference between a portfolio FD and a part time FD.
What is the difference between a part-time Finance Director and a portfolio Finance Director?
A Portfolio Finance Director – Typically, an experienced Finance Director who services multiple businesses across a variety of sectors on a ‘pay as you go’ basis. Stephen Clough, an experienced portfolio Finance Director explains (see profile) “a portfolio Finance Director chooses to work full time and will have several client companies, usually SME businesses. Some clients are regular (typically 1 to 5 days per month) and have varying job demands – a combination of strategic planning, commercial input and operational finance; usually these needs develop as the business evolves…..for others, the requirement maybe project based and need a specific skillset not available ‘in house’, such as fund raising, M&A deal support, business integration, system development/implementation, financial modelling or cash/profit improvement.
A Part Time Finance Director – Usually a part time Finance Director is salaried and may have one or two roles. The business size may vary but a part time Finance Director is usually engaged by organisations that may not need someone on a full time basis but more so than a portfolio finance director. The part time Finance Director may have greater insight into the business/sector purely because of the functional aspect of the role. Regular routine reporting, board support and staff management represent a bigger proportion of time spent in employment.
How do I know which one I need?
The best way to determine what you need is to write down the short, medium, and long term needs of you as the business owner/leader and then the business. To be clear, this is not a job description and should only be used as a mapping exercise. There will of course be crossover (both will be qualified accountants and given the level of seniority will be competent with Board and reporting matters).
Questions to ask yourself may include:-
- What do I need as a business owner/leader?
- What does my business need?
- What skills do I need right now?
- What skills will I need in the future?
- What is the investment of time needed?
- How much will cost?
Always start with the end in mind. As you go through the process of solidifying your requirements you will naturally conclude what will work best for you.