The 7 functions of an FD

Published on September 5, 2015


Your Finance Director is a key member of your senior management team. The right one will remove barriers to your growth and have the gravitas to inspire confidence in investors and stakeholders. In SMEs they think strategically, act commercially and are highly analytical. They are just as comfortable contributing to Board Meetings as they are getting into the detail and helping their team achieve their goals.

Drawing on our 20+ years’ experience in providing flexible FDs to SMEs, we believe that there are seven functions that your FD can perform.

Function What your FD should do
Act as a sounding board Be the confidante of the CEO
Listen empathetically and provide financial intelligence and wisdom
Think strategically Ensure that financial plans are aligned to strategic objectives
Identify opportunities for increasing value
Act commercially Ensure that all significant contracts enhance the cash flow of the business. Negotiate them where appropriate, especially with the raising of debt and equity and sale of the business
Provide visibility Show the effects of new projects
Develop financial models that are accurate accessible and complete, showing changes to value and cash as well as profit
Report clearly Intelligently assess and present the results of the business
Ensure that everyone understands the results and what they mean for the business
Relate results to key non-financial data
Control the finance Make sure that there are systems in place which safeguard the assets without strangling the business or alienating its customers
Be the focal point of budgets that are ‘owned’ and understood by department heads
Control risks and mitigate as far as possible
Lead the finance function Understand the capabilities of the finance team and, where appropriate, mentor and develop them. Build and adapt systems to get more accurate data faster
Work with advisers to get the best additional advice from them