Effective management of your business' finance function

When you set up your business things were relatively simple. No employees, hardly any transactions, no one to answer to.
Then you started to grow and things changed. You had to hire people, trust that they knew what they were doing and rely on them for advice on areas that were not your forte.
One of those areas was finance.
However, you find it difficult to find the right people at a level you can afford to give you the advice and financial management you require.
As a result you try and get by with what you have and it all gets a bit overwhelming. You don’t have as close a grip on your finances as you would like and little help around you.

Your business has grown in size yet you cannot afford to hire a Finance Director as the going rate is between £80,000 - £140,000.
Even Financial Controllers salaries are no less than £45,000 plus tax and benefits.
You know you need to systemise and use technology better but not sure how and where to start.
Your staff in finance only have limited experience and you’re unsure whether they are actually running the finance function of your business efficiently and making use of technology to streamline matters.

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The consequence

The result is that you sail along not really knowing whether your business could be doing better, trying to manage your finances yourself without any assistance from financial experts.
That takes your time and energy away from doing what you’re good at. Meeting customers, generating enquiries, driving your business forward.
You worry about meeting financial obligations like taxes as you don’t have real time cash flow forecasts to refer to.
Your staff are content to continue the old ways of working as they are not aware of how things could be done smarter or more efficiently. It is not in their interests to save you time!

You’re not sure whether you are profit making until after the year end when your accountant prepares the accounts as you don’t get accurate management accounts. All a little too late by then.
Your business is not giving you the financial return you hoped for when you set up your business.
You don’t have financial systems in place that you feel confident in.
You don’t have a business plan or KPi’s to measure performance so that you can build the business of your dreams.
In short, you feel alone…

The problem

When a business gets to a certain size and can afford to, they start to hire qualified finance staff to take care of the increased finance requirements of the business.
The problem is, for small businesses, they simply cannot afford to hire the right level of finance support they need.

According to the indeed.com the average salaries for the following roles are:

• Accounts payable clerk: £26,119
• Accounts receivable clerk: £27,016
• Bookkeeper: £26,340
• Senior accountant: £37,275
• Financial Controller: £59,230
• Finance Director: £84,430

To employ all of the above would cost a whopping £260,410! And these are before bonuses, benefits, pension contributions and employer’s national insurance of 13.8%!
Clearly this is out of reach for most small businesses and a huge financial commitment. However it’s exactly these small businesses that need access to this level of finance input the MOST!

Granted, as a small business you wouldn’t need to employ all of the above roles on a full time basis.

However, you do need the expertise of each of those roles at some level. The problem is you can’t employ 46% of an accounts payable clerk, 35% of an accounts receivable clerk, 35% of a financial controller, 10% of a finance director etc. You get the gist.

So you end up employing one or two people with some finance experience which either means:

1. You end up with highly skilled people covering and doing low skilled work
i.e Financial Controllers doing accounts payable and bookkeeping
2. You have gaps in your finance function because the people you employ do not have the skill set required i.e. bookeeper not being able to do what a finance director would.

That’s where we can help.

The solution

Imagine if you had someone to fully implement, systemise and manage the finance function of your business so that:

You wouldn’t need to worry about your financial management anymore
You’d have access to FD and FC level support at a fraction of the cost of employing them full or
part time
Your in house staff would have access to training and support from qualified finance professionals
You would save time and money by having access to the latest technology to streamline your
processes
You would get insight into the financials of your business to help you make better, meaningful and
timely decisions on moving your business forward
You would have access to real time management information that was accurate and gave you access to all possible financing options for growth
You could scale your business up knowing that your finance function was in good hands and could scale with you.
You would have access to a trusted advisor who understands your business as a sounding board

The Virtual Finance Office

We provide a bespoke Virtual Finance Office service to small businesses at often, less than the cost of a full time junior staff member.

Don’t let the word ‘virtual’ put you off. It may be techy sounding but our service is very much based around the human element – and giving you access to our team of experienced Finance professionals who have managed the entire finance function for other businesses like yours.
We can provide the full finance function from bookkeeper to FD and anything in between or complement your existing team with the elements that are missing.

What does a typical finance function look like?

The traditional ‘finance function’ would have had the following elements / departments:

1. Accounts receivable – responsible for invoicing and collecting cash from customers

2. Accounts payable – responsible for paying suppliers and employees

3. Financial reporting and control – responsible for implementing the systems into which the data is entered and extracted in the form of management accounts for analysis

4. Working capital management – responsible for managing cash flow and setting up systems for stock management

5. Forecasting and budgeting – responsible for setting up budgeting and variance analysis between actual and budget

6. Strategic and financial planning – responsible for giving meaning to the figures, tracking KPI`s and managing the business’ financial risk

7. Tax and compliance – responsible for compliance with tax and regulatory bodies like HMRC and Companies House.

Large companies would have a whole team of people to make up the business' finance function covering each of the above areas - from accounts payable and receivable staff to financial controllers and CFO's.

Smaller businesses would typically only have a limited number of people to handle all of the above functions if any at all - sometimes it's just the owner together with non-finance professionals that try and get by.

Although small businesses don't need a whole team of people to cover all of the above, they do need cover in all of the above finance function areas to some extent.

Problem is, it's not normally within reach of most small businesses to get the optimum level of cover in each of the finance function areas that they need.

So what benefits can a Virtual Finance Office bring to you?

Fundamentally, our VFO offering can give you cover in all of the above fundamental finance function areas in line with your business needs and at an investment your business can afford.
Furthermore, another main benefit is the comfort of being able to hand responsibility of managing your finance function to someone else to let you concentrate on what you’re good at and growing your business.
Technology these days has made it possible for firms like ours to provide a full finance function offering to our entrepreneurial small business clients.
It’s essentially a combination of a full finance team, business coach and strategic financial expert partnering up with you to help you achieve your business objectives.

Other benefits include:

• Taking away the hassle of managing your own bookkeeping and ensuring that it’s done regularly and accurately so you don’t miss out on tax reliefs and all eligible VAT paid.
•    Synchronisation of your financial data with your business objectives to ensure you receive useful management information to help you make better decisions
•    Provision of real time management information with analysis in a timely manner
•    Strategic financial input on growing your business

• Access to the latest technology to streamline your operations and save time and money
• Having finance staff report to someone who can hold them to account
• Assistance with helping you obtain finance to grow your business
• Helping you to build a profitable and sustainable business by charting out a plan and measuring KPi’s
• Managing financial risk in your business that may otherwise catch you unaware

What is your investment?

Every business is unique. Your objectives and requirements will be different to another business owner’s. You will be at a different stage in your business compared to the another.

So, we provide you with a range of options so you can choose the package that best meets with your needs.
For each of those packages we give you a fixed monthly price so you can budget and plan. And each of these packages can be tailored so you get what you want.

In other words you’re in complete control and can build the Virtual Finance Office package that best meets your needs and budget

It allows you to scale up the service as you grow and scale down if you retract. In other words it’s fully flexible.

Contrast that with having to employ finance professionals whether or not you fully need them and you will see the savings you can achieve.

There is no minimum contract. if you are not getting value from the service, you can stop it at any time giving you complete control and flexibility.