How to set yourself up for success as a financial director
Working as a financial director (FD) is a challenging yet rewarding role. Those who take on this sort of role must have certain characteristics in order to do a good job. From taking a dynamic and friendly approach to data to possessing a strong commercial acumen, working as an FD and reaching the goals of effective financial decision-making is a tough task, but it is possible. This article will explore some of the primary ways to make a mark as an FD.
What does an FD do – and how to be different
While FD roles are often well-paid and intellectually challenging, the reality of the situation is that finance teams in many organisations are largely routine-focused and are relatively devoid of opportunities for innovation. According to the 2017 “Strategic finance leaders survey” study released by AccountingWEB, the top activity for an FD to focus on was cost reduction.
This is significant, because it’s a reactive task focused on dealing with pre-existing problems rather than preventing future ones. Other popular activities for FDs included dealing with office costs, which was one of the top priorities for 59% of respondents. While this is a key task, it’s also not something that takes the business into the new territory of innovation.
However, strategic analysis was extremely low down the list, and just over 2% said they did it. It’s easy to see why this sort of statistic continues to languish. The motivation to change this status quo for an incumbent FD might be low. However, for a new FD entering an organisation for the first time, it’s easier to do. With no investment in the current situation and a clear incentive to mark themselves out as different to their predecessor, a new FD is in a prime position to do this.
First, they will often have to ensure that they’ve got accurate information at their fingertips before they’re able to make any strategic decisions. This can be done through setting up meetings between the new FD and each department head, but that’s a highly time-consuming way to do it – and there’s no guarantee that qualitative information provided verbally will be accurate.
Instead, implementing a data solution that allows all teams to submit their information to a centralised dashboard means that this kind of strategic analysis can be carried out. With 65% of British small- and medium-sized firms saying that they don’t use any accounting software as recently as 2017, there is a real opportunity here for a new FD to think outside of the box and establish themselves as an overhauler.
A productive use of time
In any business that hires staff, time also means money. All employees are selling their labour in exchange for cash, and that goes for an FD as much as for a junior member of staff. Because of their area of expertise, FDs are often expected to be extra efficient when it comes to ensuring that their time is used effectively and in a profitable way.
Luckily, there are some ways for a new FD to do this. Implementing a data-fuelled accounting and finance system means that an FD will be able to identify areas for savings. Accurate timesheet data from HR can be cross-referenced against salary spending to uncover where staff teams may be bloated, for example, and a tangible change can be made.
The good thing about focusing on time efficiencies is that it not only helps to save the company money, but it also means that an FD can build key relationships with other team members. One of the key characteristics of a successful FD is an ability to solve problems, and this can be achieved with ease. By making finance tools “available,” an FD can do their new-found colleagues a favour. A computerised dashboard that allows the marketing team to see how much advertising budget they have left, for example, will both save the company time and money and will also act as a welcome boon to colleagues.
The position of financial director provides the occupants with a chance to stretch themselves. However, in the face of lots of administrative tasks such as office cost optimisation, it can be difficult to carve out time to do things a little differently and make a mark. That’s why more and more FDs are turning to the implementation of data-driven finance software solutions as a way to emphasise their value.