Nicola Statham discovers that outsourcing at director level can be hugely beneficial to business
When you are building and running a successful business, you need to concentrate on what you do best and you want to concentrate on what you enjoy most. However, too many entrepreneurs pay insufficient attention to the financial and legal aspects of their business; they bury their head in the sand when it comes to rules and regulations or entrust the money side of things to an inadequately qualified member of the accounts team.
Step forward a flexible finance director and legal director. There are myriad businesses which need someone highly experienced in these areas. The finance director oversees financial strategy, prepares forecasts and ensures that the company is on track to achieve them, generally handling high-level finances and managing risks which would otherwise get neglected. The legal director advises on all legal issues, placing emphasis on the commercial position.
For 12 years, Simon Walters has been undertaking flexible finance director work and leading a team of FDs, each juggling a portfolio of clients for whom they work on a part-time basis. Now operating through West End-based Headline FD, Simon and his team spend time with clients who come from a wide variety of sectors including family offices, the property sector, law firms, not-for-profit organisations and SMEs.
Simon’s experience as FD includes healthcare, professional services, investment companies, natural resources and more. The skills of a strong FD are transferable across sectors, so Simon and his team can handle the requirements of every assignment. Simon headlines each project, undertaking all the work for certain clients but involving one of his team for clients where that FD’s skills are better suited to the task.
Simon’s longest-running client is Dan Ross, owner of publishing company Intersection Media and serviced-office operator Émigré. Simon has worked with Dan on a part-time basis for more than 12 years, during which time Intersection magazine has achieved great acclaim and Émigré’s Fieldworks site in London Fields has become a hub for trendy tenants. “The outsourced FD arrangement has allowed us to run an efficient, effective business, concentrating on our products and our customers,” says Dan.
Headline FD is a firm with a twist – despite being regulated by the Institute of Chartered Accountants, it doesn’t do audits or tax work; its staff simply carry out the work that each client’s full-time finance director would do if they had one.
Thanks for Franks, an award-winning maker of gluten-free granola bars and traybakes, is another client. Owner Frank Boltman is a serial entrepreneur but needed an FD to advise on expansion and fundraising, to assist with product pricing, and to open doors with potential financiers. Frank says: “The assistance of Headline FD has been invaluable and helped me to generate huge interest in my product. When you’re negotiating with High Street multiples, it helps to have a strong FD on your side.”
Business planning, financial modelling, cashflow generation, board reports, structuring deals and fundraising are all covered by a part-time FD, as is dealing with that ever-demanding bank manager. The work is unlike the role undertaken by a mainstream firm of accountants, who would primarily deal with compliance work on tax and accounts preparation.
For more than a decade, Simon has been part-time FD at a north London-based property group. With residential and commercial projects, some owned outright by the client and some in joint ventures, plus trust and LLP structures as well as limited company vehicles, there’s an array of challenges to keep a finance director on his toes.
Simon spearheaded the team which won Independent Firm of the Year for two years at the British Accountancy Awards – the ‘Oscars’ for the profession.
Ed Simpson qualified as a solicitor in 1991 and worked in private practice for five years before moving into in-house legal roles. In 2007 he set up London-based The Legal Director to offer experienced GCs (general counsel) and legal directors on a part-time basis to SMEs that didn’t need and couldn’t afford such a resource on a full-time basis. Ed has a large team working with him, all of whom have at least 10 years’ experience in senior in-house legal positions. When a company uses The Legal Director’s services, they get an experienced business lawyer who advises on all legal issues. The lawyer gains knowledge of all of the client’s legal affairs, meaning that he (or she) can be proactive and ensure that the client’s business is built on firm legal foundations, rather than reacting to problems.
“We cover all kinds of industries all over the country – when it comes to business, legal issues are usually the same,” says Ed. “We prefer to work on a fixed monthly fee that covers everything that arises. This way there are no nasty surprises.”
Fashion group Jacques Vert (JVG) hired The Legal Director in 2013 to advise on property issues. Following the resignation of the company secretary JVG recognised a need for a senior legal resource to help with top-level strategic legal support. Amanda from The Legal Director goes into JVG’s offices once or twice a week, working remotely the rest of the time. This means that JVG benefits from having a senior resource available to it every day whilst only paying for a part-time service.
Pet food supplier Burgess Pet Care started off using The Legal Director on an ad hoc basis but since 2011 has had them on a retainer basis one day a month. “This has been an ideal solution for a growing business,” says Burgess managing director Paul Miley. “Ed and his team offer flexible hours to meet our needs. They have undertaken a full audit of the business with us to set priorities, while still meeting our budget constraints. O
nce upon a time most companies would have a full-time bookkeeper on the payroll, but this is another role that is becoming increasingly outsourced. Many companies do not need an experienced finance professional in a full time capacity but do need an individual to either mentor an inexperienced bookkeeper, to sort out a legacy issue or to set up financial systems to support the business. The bookkeeper‘s tasks include preparing financial information for auditors, detailed analysis for the directors, and monthly or quarterly management accounts. Bookkeepers also do the payroll, the VAT returns and generally support the FD by maintaining the company’s accounting records.
Brian Marks has been running Stanmore-based Marks & Associates for 16 years, providing bookkeeping and interim financial controller services to a range of SMEs. “A part-time bookkeeping service is hugely beneficial to the client,” he says. “They engage an experienced professional with full flexibility to suit them, at a cost that is a fraction of a mainstream practice.” Outsourcing is increasingly common in 21st century business. Any company that faces challenges – expansion, contraction in size, a need for additional finance, family succession and business planning to name just a few – is a potential user of a part-time finance director, bookkeeper or legal director. Whether the economy improves or takes a turn for the worse, a bought-in resource is an important function, and unlike hiring a full-timer, doesn’t incur a recruitment fee.