Many entrepreneurial businesses need the skills of a professional to oversee and direct their financial operations.
In large companies these are the financial directors but smaller businesses don’t need and can’t afford
a full time FD. So instead they turn to their accountant, many of whom are now providing the services of a ‘virtual FD’ at an affordable cost, made possible by the switch to cloud-based software.
Accountants no longer just provide book keeping
and year-end accounts and tax compliance services – entrepreneurs expect them to provide proactive business advice.
In yesterday’s email I talked about the huge growth in cloud accounting systems such as Xero, FreeAgent and more recently Capium, and the automation of payments and bank feeds.
Another example of this shift is in the use of collaborative software. As accountants become more like a ‘virtual FD’ for an entrepreneurial business, so too must they become more integrated into the business.
The use of collaborative software allows accountants and
business owners joint access to the likes of profit and loss accounts, balance sheets and sales pipelines, for example. Not only does this allow changes to be made in real time, it also increases transparency for both parties.
So what should a Virtual FD be doing for your business…..
- They should be
able to look into to future to see what the financial needs of the business will be;
- They should negotiate funding facilities to ensure the business can manage its cash flow needs;
- They should be able to foresee the tax consequences and risks of decisions;
- They should help the business to achieve the best possible credit scores;
- They should Identify ways to reduce costs and improve profitability;
- They should understand the business owner’s objective and focus the business on achieving those objectives; and
- They should ensure financial and regulatory compliance and the accurate and timely reporting of management information.
Tomorrow I’ll look at the questions you should be asking your accountant if you want a virtual FD in your business.
Noel
Guilford