Virtual CFO Benefits

You have a bookkeeper or a small accounts team responsible for ensuring that your customers are paying you, and that suppliers and payroll payments are made when they are due.

At the end of each financial year, an accountancy firm prepares your annual financial statements and submits your tax returns.  

On a daily basis, you lack financial transparency, which is impacting your business growth and causing sleepless nights.

Your business might not be big enough to justify the necessity (and expense) of hiring a full-time virtual CFO, but…

Is it time to find a part-time virtual CFO?

A virtual CFO could provide the clarity, direction, and financial credibility you are looking for.  If affordability is a concern, the cost-effective nature of a part-time virtual CFO might surprise you. You can access senior-level financial expertise without the commitment or expense of a full-time employee.

This forward looking service is so new that the job market has yet to decide on a title. The same position is known as either –

    • Outsourced Finance Director

    • Virtual Finance Director

    • Fractional Finance Director

    • Virtual CFO

    • Fractional CFO etc

However the services and benefits are similar –

Financial Clarity

You have aspirations, whether it’s to expand, secure funding, sell, or simply become more profitable. To achieve these goals, you require comprehensive financial insights to guide your decisions.

Without this information, it’s challenging to identify your most profitable customers or products and determine the areas for potential growth.

Setting a realistic yet challenging budget involves more than a vague 10% increase estimate. It requires a detailed understanding to gain your team’s support and ensure accountability in achieving targets.

Predicting cash flow fluctuations in the upcoming months is crucial to avoid running out of funds, especially when expenses like VAT payments are due. A Part-Time Virtual CFO can assist in creating budgets, cash flow forecasts, client profitability reports, and management accounts, providing valuable insights and expert analysis to help you make informed decisions.

More time for you to do what you went into business to do.

Having a skilled virtual CFO on your team allows you to focus on your core abilities and advancing your business – the tasks you envisioned when starting your business. Additionally, you will be more well-informed.

Better decision making

A virtual CFO can provide valuable financial knowledge and insight to help you make informed decisions. Serving as your trusted advisor, the Part-Time virtual CFO will support your strategies, offer valuable feedback, and maintain impartiality with your best interests at heart.

Enhanced relationships

Having a financial expert with a strong reputation in your company can enhance your financial standing with banks, investors, auditors, and insurers, potentially leading to new opportunities. Allow your virtual CFO to handle negotiations and bolster connections with stakeholders.

Flexible and cost effective

Receive financial expertise and strategic advice at the board level for your business without the expenses and obligations associated with hiring a full-time CFO.. You only pay a day rate for the days you require. Additionally, a virtual CFO can provide flexibility by adjusting the time dedicated to you during crucial projects.

About FD Solutions and Accounting

FD Solutions and Accounting provide virtual CFOs to growing and ambitious small and medium businesses in South East England with a typical turnover in excess of £100K.  Typically we spend between 5-15 hours per week working with each client through a mixture of remote and on-site.

Hiring a part-time virtual CFO can provide your business with the expertise and practical knowledge to take it to its next stage, whether through organic growth, acquisition, securing funding, private equity or preparing for an exit strategy.   You do not need to hire a full time CFO to receive the benefits of one.

Straight talking with an objective of making businesses more financially aware our dynamic approach sets us apart.

Please message me for more information.

0% Funding Loan Kent and Medway based businesses

Excellent news for Kent and Medway based businesses…

Kent and Medway business fund is now accepting applications for 0% loans between £25K – £99K from small and medium sized business start-ups to help develop new and expand existing products, services or processes which in turn can create jobs, drive growth and improve productivity. 

Could be this expenditure will quality for generous R&D tax credits too!!!.

Key eligibility requirements

Your business must be able to prove a good profitable track record

Be creating or protecting sustainable jobs

Must not be subject to collections or insolvency proceedings.

Any funding must be 20-30% match funded via business reserves or bank loans.

Please note depending on assessed risk at the discretion of the council further personal security may be required.

Established businesses or those seeking a larger loan can apply for a KMBF Standard loan.

Finer details about both loans and how to apply can be found at

https://www.kent.gov.uk/business/business-loans-and-funding/small-business-boost-loan

Or speak to me to help assist you further.

Are You Selling Your Business?

A word of caution when selling your business which contains personal guarantees for the business loans or overdrafts.

A case was reported in the financial press recently where a business owner had sold their business and duly informed their bank of the sale and their desire to be removed from the bank account as they were no longer a director providing the new owner details at the same time.  Role forward 18 months and the bank are demanding the old owner repay an overdraft of almost £40K racked up by the new owner who has also filed for insolvency….

The mistake the former owner appears to have made was not asking the bank to remove their personal guarantee specifically and requiring the level of joined up thinking by the bank – which through a combination over reliance on computer programmes and overseas outsourcing does not always happen.

Fortunately through some fairly hard lobbying by the newspaper the bank accepted their oversight however in conclusion as part of the business sales process make sure the cancellation of personal guarantees are specifically requested and confirmed in writing plus better still existing business bank accounts are closed.

Financial Planning for Successful Rural Diversification

Farm Accountant FD Solutions and Accounting believe that a mixture of both economic and financial pressures are forcing farmers to diversify their income streams to support their businesses long term.

Engaging professional support in the feasibility stages maximises the chances of developing proposals which will secure the bank funding needed.  Here are five areas worth consideration in the planning stage.

Diversification

With so many options available, farm accountants FD Solutions and Accounting believe what works for one farm might not be possible for another.  Always keep in mind whether this income stream will achieve desired end aims and whether this produces –

  • Cashflow to support existing lines of business.

  • Employment or a business opportunity for family or staff members

  • Capital growth

  • Better use of assets

  • It is always preferable to consider more than one investment opportunity so as to weigh up each’s strengths and weaknesses against original objectives.

Return on Investment

Alongside the usual financial KPI measure, we believe certain non-financial matters could be equally as important, such as –

  • Can the existing business still run with management’s time diverted to this potential project.

  • How will this impact existing staff – who typically bear the impact of change.

  • Is it possible to assess what additional skills (or training) will be required.

  • How resilient do you consider yourself and have you planned for unforeseen issues?

Professional Advice

Farm accountants FD Solutions and Accounting consider engaging professional advice during the planning stage is key.  This could be a fractional finance director / CFO, solicitor or land agent together with family members.  Typically lenders will be looking to satisfy themselves that –

  • Any planning permission has been received  

  • Any renovation or new build has been costed and competitively quoted.

  • Does any funding request adequately cover project timescales with adequate contingencies

  • Are relevant licences in place

  • What corporate structure will the new venture take – for example limited company.

Business Plan

A good business plan should provide confidence to you, family and lenders. Farm accountants FD Solutions and Accounting recommend you identify areas to focus on and that risks are properly accounted for.

This should include a summary covering what is planned, funding requirement along with the payback period.  The main plan ought to include –

  • What makes the venture unique or different

  • Local competition

  • Evidence of a customer demand.  This could come from, for example research or test trading

  • Route to market and why – for example social media, content and platform.

  • Are the financial projections expected – if they look too good the lender will most certainly question them!

  • Assumptions and research to underpin financial projections

  • Budget projections for different scenarios – best, worst and most likely.

  • Reasonable repair costs to keep the project ‘like new’

Is the cash conversion cycle reasonable – no good having profits tied up for long periods as production costs or trade debtors.  Cash makes loan repayments not profit!

What the Lender Wants

From FD Solutions and Accounting experience with farm accounting expect a Dragon’s Den type of challenge to your figures.  Lenders require confidence every aspect of your investment stands up and that a business plans shows –

  • A proposition which is well considered and researched

  • Balanced funding proposal clearly defining your stake in the new venture

  • Contingency plan scenarios if business levels are not achieved.

  • Route to repayment of the lenders funding together with a timescale

FD Solutions and Accounting has many years of experience preparing business plans and understand the importance of future investment.  We are committed to helping our farming customers turn their plans into success.  We are based in Paddock Wood, West Kent and have clients throughout the county, in East Sussex and nationally.