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Your agency is growing and for a while now you’ve realised you need more help managing the money side of things. Maybe you feel like you don’t have enough time to spend on your company finances and you want to share the responsibility with someone else. Your accountant may be doing a great job at meeting your tax and compliance requirements but you’ve reached a point where need more. You should hire a full time Finance Director, right? Not necessarily.
A good FD will help you save money, make more cash, define your business model and set the foundations for future growth but adding another non-billable team member is always a big decision for an agency. Before you add a huge chunk to your fixed cost base, consider the alternatives.
What does your agency really need?
Think about what you actually need and what problems you are looking to solve. Do you need someone to own the whole finance function, to manage your bookkeeper, produce & present analytical and insightful reports to the management team or just provide strategic ad hoc advice?
Here are some aspects of agency finance to consider:
Data Integrity
Assuming you have the basics in place (bookkeeping, VAT & CT returns and payroll) you’ll also need someone to take responsibility for the integrity of your Xero or Quickbooks data- that is, making sure it’s kept up to date and that everything has been correctly coded. This should be someone with a solid understanding of what the numbers mean for the business. Xero data isn’t just compiled for compliance, it’s there to allow you to report on it and reporting on out of date, incorrect data is not just pointless, it can be harmful to your business.
You want:
Everything in order and data that can be relied on
Who?
Your bookkeeper (although it’s always good to have a system of checks and balances)
A part time or freelance Financial Manager/Controller
A full time Finance Manager/Controller or Finance Director
Financial Reporting
If you don’t already have some kind of monthly reporting in place, now is the time. Without measuring your results you won’t have any awareness of what is affecting the performance of your business and you won’t be able to change anything so any mistakes will be repeated. Reporting doesn’t have to be complex but it does need to produce numbers and metrics you can understand and act on.
You want:
Reporting results you can confidently base decision-making on
Who?
Your accountant - they may already be producing monthly management accounts for you but ask yourself, are they easy to understand, engaging and do they allow me to confidently make decisions?
A full time, part time or freelance Financial Controller/Finance Director
A solution like our monthly Remote CFO Reporting service
Leadership & Management of Finance Function
You may have an in-house bookkeeper and/or other finance staff that need direction. You don’t have the time or financial training to manage them so you’d like to outsource it to someone else.
You want:
A finance function that runs like clockwork with minimal involvement from you so you can focus on what you do best
Who?
A full time, part time or freelance Financial Controller or Finance Director
Strategic Direction
A company with growth aspirations needs strategic financial support to move forwards. Someone with specific agency experience that can understand your business and provide business advice can really drive your long term performance.
You want:
Someone to offer guidance, answer your questions promptly in plain English & provide invaluable insight in board meetings
Who?
A full time FD- depending on the size of your business this may be the right choice
A part time or consultant FD
Summary
Adding another full time non-billable team member is always a huge decision for an agency because they will never be able to pay for themselves in client work. Choose carefully and the right finance resource will drive your company forwards, allowing you to grow. Choosing the right time to hire a full time FD is never easy. You may be ready to take the leap
but you can take the pressure off by engaging a virtual FD service like ours.