It is widely accepted that for businesses to survive and grow there is a need for easily understood financial analysis, enabling business management to identify the best direction for the firm in terms of products and markets.

With growth, of course, comes the further need to introduce new systems to maintain financial control, as well as the need for greater levels of analysis to manage costs and build the bottom line.

Both growth and survival require the forecasting and management of cashflow. At times when bank finance is in short supply, companies demonstrating strong financial management can gain the confidence of the banks, and so gain access to scarce funds and better deals on the cost of that finance.

In bigger companies this is the job of the finance director (FD) whose role is very different to that of a management accountant or a bookkeeper, who handles the day-to-day work and produces numbers with an historical, rather than forward-looking, perspective.

An FD will interpret the numbers and provide advice on future strategies In small or medium-sized companies the role is fulfilled by the business owner supported by bookkeepers or management accountants, but there comes a point when greater expertise is needed and there are simply insufficient hours in the day to do this without detracting from the main role of building the business.

The obvious answer would be to hire an experienced finance director, but for many growing companies the cost is prohibitive.

The right blend of background and experience is unlikely to be available at less than £100,000 a year, and the business could not afford the cost, and probably a full-time appointment at this level would be overkill.

So what can business owners in such a situation do?

One solution is to use a management consultancy firm to work on specific projects, but this may be costly and not provide the day-to-day involvement that is really needed.

An alternative is to appoint a part-time finance director. A part-timer will probably cost anything between £500 and £1,000 a day, depending on level of experience, location and the complexity of the company and its requirements.

The arrangement can be set up to cover just what the company needs and can include a fixed number of days a month at the company premises supervising the accounting functions and attending board meetings and so on.

But this can also be extended to cover additional support and advice throughout by telephone and by e-mail.

This will work out considerably cheaper than employing someone with equivalent experience full-time and avoids the commitment associated with a full-time employee.

Aside from cost advantages, by having someone part-time, small and medium-sized companies can often gain access to the experience of FDs who have a previously worked at board level in larger organisations, something that would be close to impossible if smaller companies were to try and make a full-time appointment.

There are a few potential drawbacks. A part-time appointment, if not thought through carefully, can result in a role closer to that of a consultant, rather than a finance director fully engaged in the activities of the company.

And whatever the contractual arrangement in place, it has to be accepted that the FD may be unavailable and working elsewhere when needed.

How can a company identify the right person for such a role?

The first thing to do is to work out what the company’s requirements and priorities are. Is it commercial experience within a specific industry that is needed to help drive growth? Or is raising finance for acquisitions or additional working capital the top priority?

Or maybe a company needs a review to identify profit or cash management improvements to streamline the business for survival?

It’s possible the main purpose of the role is to help prepare the business for sale in the future, ensuring maximum shareholder value when that sale takes place.

These priorities when identified can help build a profile of the ideal candidate, but the question remains how to find the right individual.

There are a number of agencies that specialise in providing part-time FDs and they could be asked to suggest suitable candidates.

Organisations such as Business Link maintain information on potential individuals and can be asked to advise. Accounting firms and other business owners could be asked for recommendations.

Many individuals working in this area have their own websites and can be located by Internet search.

In addition to the technical expertise and specific experience needed to match the company’s needs, business owners should always take up references and consider personality, as well.

It is vital that a good working relationship can be formed for the appointment to succeed o Contact: Ian Metcalfe, Oxford Accountants for Business, 0772 229 9407.

Web: www.oxfordaccountantsforbusiness.com