Modern business owners know the days of balancing books with pen and paper are long gone. But did you also know that your new finance director could be a Zoom call away?

A virtual FD – also called a remote FD – can equip your business with expert financial advice without the cost of in-house hiring. Here’s what you need to know.

What is a virtual FD, anyway?

Virtual FDs can handle everything from financial reporting and forecasting to advising on investment and growth strategies, all from a remote location.

This unique cooperation model offers flexibility and cost-effectiveness, delivering access to expertise without cumbersome in-house hiring.

FDs often possess both niche and general expertise across multiple industries, from construction and manufacturing to hospitality and e-commerce.

How a virtual FD can change the game for small businesses

If you require in-depth financial analysis and advice, a virtual FD can provide you with the necessary expertise without going through the rigmarole of hiring a full-time employee. Here are some scenarios when you should consider hiring a virtual FD for your business:

You’re scaling your business

Your financial and tax responsibilities skyrocket if your business is rapidly growing.

For example, if you begin employing people for the first time, you’ll need to consider payroll and pension contributions immediately. Or if your taxable turnover exceeds £85,000, you’ll have to register for VAT and start charging VAT on your products and services. There are various tax bands and thresholds to be aware of, too, and correctly navigating these can minimise your tax liability.

A virtual FD can offer financial modelling, budgeting and strategic guidance to help you effectively manage your business’s growth.

You have complex finances

As businesses evolve, so do their financial commitments. A virtual FD’s professional support can be invaluable if you’re dealing with multiple revenue streams, complex customer contracts, international transactions, or industry-specific compliance requirements.

You want expertise that doesn’t break the bank

For SMEs with tight budgets, a virtual FD can provide the financial leadership you need at a fraction of the cost of a full-time executive. You pay for the service as you use it, which could suit businesses with limited resources.

You need strategic insight

A virtual FD offers strategic guidance, helping to shape your business plan, identifying growth opportunities, and providing data-driven insights to help you make well-informed decisions for your business’s future.

You’re preparing for investment or sale

If you’re considering securing investment or selling your business, a virtual FD can ensure that your financial records are in top shape, adding credibility and potentially increasing your business value.

You’re facing financial challenges

Every business encounters bumps in the road – cash flow issues, dropping revenues, or unexpected expenditures. A virtual FD can help enterprises navigate financial challenges, offering advice on different contingency plans and recovery strategies that could help.

The benefits of hiring a virtual FD

Hiring a virtual FD can offer the following benefits:

  • Cost-effectiveness: Hiring a full-time, in-house FD can be costly, particularly for small businesses and startups. A virtual FD can offer the same level of expertise but at a fraction of the cost.
  • Flexibility: Not all businesses require a permanent FD. Remote hiring offers flexibility, providing access to top expertise without full-time contracts.
  • Expertise across sectors: Many virtual FDs can bring a wealth of industry-specific knowledge to the table.

How to choose the right virtual FD for your business

Selecting a virtual FD is much like choosing any other key team member. You’ll want to consider their experience, particularly in your sector, and how comfortable you are with them.

After all, they’ll handle one of the most important parts of your business – your finances. You should:

  • Check their qualifications: Ensure any potential virtual FDs are qualified and have experience in your industry.
  • Look at reviews from past clients: Previous or current clients can give you an insight into how effective the virtual FD is at managing finances and providing valuable advice.
  • Assess the technology: Ensure they use secure, reliable tools for managing and sharing financial information.
  • Cost: Understand their fee structure. Do they charge a flat monthly fee, or is it project-based? Make sure the cost fits within your budget.
  • Compatibility: Last but not least, do you get along? A good working relationship is crucial when entrusting someone with your business’s financial well-being.

Looking for top-level financial expertise to help your business thrive? Get in touch to discuss our virtual FD services today.