In today’s fast-evolving business landscape, small and medium-sized enterprises (SMEs) often grapple with the complexities of financial management and compliance. They are largely under-served when compared to their larger counterparts and struggle to access consistently meaningful data needed to make important business decisions.

A senior financial professional, such as a CFO or Financial Director (FD), plays a pivotal role in solving these challenges; by taking a business-partnering and strategic, forward-looking role, they can help with ‘big picture’ financial planning and advice. However, the challenge for smaller businesses often lies in the resources and expertise required to fulfil these roles effectively in-house.

Challenges in financial management

Some of the key challenges faced by SMEs regarding financial management include:

• Expertise and experience gap: Smaller businesses may find it challenging to attract and retain individuals with the right mix of expertise and experience needed. The competitive market for top talent intensifies this issue.
• Resource constraints: The financial burden of hiring a full-time, senior financial executive can be expensive for SMEs. It is more than just the salary – there are also additional costs related to benefits, training, and technology.
• Compliance and risk management: Staying abreast of the latest financial regulations, tax laws, and compliance requirements is crucial. SMEs often struggle with this aspect due to limited resources and expertise.
• Strategic financial planning: Developing and implementing effective financial strategies requires a level of insight and experience that may be beyond the scope of the existing team within an SME.
• Affordability: many SMEs do not require a full time CFO or FD and would be better off outsourcing the role on a fractional basis.

Outsourcing the role

Given some of the challenges mentioned, outsourcing the CFO or FD role can support your business’ financial goals and growth, and this is where an outsourced fractional CFO can be the right solution for you and your business.

• Access to expertise: An outsourced fractional CFO role provides SMEs with immediate access to experienced financial professionals who have a broad understanding of finance, taxation, and regulatory compliance. This level of expertise supports strategic decision-making and can significantly enhance financial performance.
• Cost efficiency: By outsourcing, SMEs can transform fixed salary costs into variable costs that scale with their needs. This approach not only saves on the direct costs of employing a senior executive but also on related overheads.
• Focus on core business functions: Delegating financial responsibilities allows business owners and their teams to concentrate on core business activities. This can lead to better operational efficiency and faster growth.
• Risk mitigation: Outsourced financial professionals are adept at navigating the complexities of financial regulations, ensuring that the business remains compliant with UK tax laws and accounting standards. This reduces the risk of costly errors or non-compliance issues.
• Strategic insight and support: Outsourcing the role also comes with the added benefit of objectivity – whilst the individual can get on with the job at hand, assisting with budgeting, financial forecasting, and identifying opportunities for cost savings or investment, the underlying benefit is having someone qualified to see the ‘bigger picture’ and provide an unbiased perspective on the strategy, goals, financials and more.
• Flexibility and scalability: As the business grows, its financial needs will evolve. An outsourced role offers the business the flexibility to scale up or down as required, providing the right level of support at each stage of growth.

How can we help?

For SMEs, the decision to outsource the CFO or FD role can be a strategic move that drives efficiency, reduces risk, and supports business growth. By partnering with a specialised accountancy firm, such as haysmacintyre, SME businesses gain access to a level of expertise and experience that might otherwise be inaccessible. This approach not only helps in overcoming the challenges of financial management in a small business environment, but also positions the business for sustainable success in a competitive marketplace.

Our Outsourcing team is expertly positioned to support your business’ growth, working with you collaboratively to meet your strategic goals whilst maintaining business continuity. For more information on how we can help, contact Elena Ramkalawon, Partner and Head of Outsourcing, or Dominic Noakes, Director.