Establishing a solid finance function is about more than just keeping on top of the bookkeeping. It's about laying the foundation for scalable growth, informed decision-making, and long-term sustainability for your small to medium sized business.
Whether you’re launching a new venture or navigating the challenges of growth, creating a robust financial structure will give you access to smarter insights and help you make more confident financial decisions.
Here are some tips to help you get it right!
Start with the right finance team structure
Like most SMEs, you probably started managing your finances with minimal staff. You might have even taken on these duties yourself. But as your business grows, this ad-hoc approach can lead to inefficiencies and risks. This is why building an efficient internal finance team or leveraging outsourced support is essential.
A hybrid model may work best, involving a lean internal team that’s focused on day-today operations, supported by outsourced professionals for strategic input and compliance. Outsourcing elements such as payroll, tax filing, or even bookkeeping can also free up your valuable time and reduce overheads.
Develop strong financial processes from day one
You need to implement consistent procedures for budgeting, reporting, approvals, and cash flow monitoring. This typically includes regular financial reviews, monthly management accounts, and timely tax submissions – all things that your parttime FD or CFO can assist you with on a flexible basis.
Establish key roles early
Your first hire is likely to be a bookkeeper or finance assistant. They will be responsible for processing transactions and maintaining solid, accurate records. As your company’s financial needs increase, you may need to bring a Financial Controller or experienced accountant on board to manage reporting, budgeting, and compliance issues.
Remember, however, that working with a part-time Finance Director (FD) gives you access to senior-level expertise without the commitment or cost of a full-time hire. They can also help with financial forecasting, raising investment, and, crucially, building your business’s financial resilience.
Implement integrated financial systems
Technology will play a critical role in scaling your finance function. Adopting cloud-based, integrated financial systems such as Xero and associated apps ensures your data remains accurate and visible, and reports can be generated in a matter of minutes.
These systems streamline tasks such as invoice management, expense tracking, and bank reconciliations. This means you and your teams can focus more on strategic analysis and less on admin.
Integration is key, too. For example, purchase invoice automation tools such as Dext can be linked directly to your accounting software to automate the recording and categorisation of these costs – something that can otherwise be incredibly time-consuming.
What are the advantages of outsourcing strategic finance support?
You might not need a full-time CFO, but you’ll certainly benefit from part-time strategic support!
Outsourcing to a part-time FD or CFO gives you access to high-level insights and financial leadership without bearing the full cost of employment. From general financial planning to securing funding and implementing sensible performance metrics, there are plenty of ways these flexible professionals can improve your finance function without blowing your staffing budget.
A robust finance function is vital to the health and growth of your SME. By building the right team, leveraging technology, and establishing clear processes, you can lay the groundwork for sustainable financial success. Contact me, Mark Brown at L4 Financial, for help achieving this in the most cost-effective way possible!
w: L4Financial.co.uk
e: Mark@L4Financial.co.uk
t: 07960 031554