Five reasons why your agency needs a virtual FD
As your creative agency grows, you’re going to need expert help to move the business forward – whether that’s advice around evolving your financial model, raising more finance or spotting opportunities to help grow the agency further.
This is the point where having a finance director (FD) on the team is a sensible move. But should you opt for hiring an internal FD, or go for the option of an outsourced ‘virtual FD’ to help you drive the financial management of the agency?
We think you’ll get more value from taking the outsourced option, and we’ve highlighted 5 key reasons why your agency needs a virtual FD on the board.
1. An FD helps you look to the future
To start with, let’s look at why your agency needs an FD. In essence, it’s down to a key difference between what a traditional accountant delivers, and the added value you’ll get from having an FD driving the financial side of the business.
A traditional accountant does your accounts and tax returns. They’ll show you where the agency has been in the PAST, but will give limited insight into your future.
A modern FD helps to improve the FUTURE performance of your financial model. They’ll reduce costs, define your business model and set the foundations for growth.
An FD takes the agency to the next level, by bringing you a more grown-up, detailed and forward-looking overview of your finances.
2. An internal hire is a big investment
If profits are looking good, you may decide that having your own FD on the board is a sound move for driving your future direction. But there a few key considerations that can make an internal hire a more problematic option.
Taking on a permanent FD means:
A hiring commitment – creating an internal finance director role commits you to having this long-term role in the business.
A sizeable salary to pay – to find a finance professional with the required skills and experience, you’ll end up paying a market-rate salary to your brand new FD.
An FD-level workload – most FDs will baulk at getting their hands dirty with basic finance admin, and will want to focus on the higher-level financial strategy.
The need for experience of the creative sector – your FD will need to understand the specific challenges and goals faced by a creative agency.
On top of this, you’ve got to find, interview and vet the right person for the FD role, which can be time-consuming. So, if your agency is at early stage of development then hiring an internal FD may be more trouble than it’s worth.
3. A virtual FD is more flexible
So, what’s a ‘virtual FD’, how can they help your agency to get in control of the numbers, and why should you consider engaging one?
A virtual FD delivers all the same core benefits of an internal FD. What’s removed is the long-term investment of a permanent director role, with the added bonus of the increased flexibility and scope of an outsourced model.
With a part-time virtual FD, you still the quality financial advice needed to drive the agency to the next stage of development, but with some additional bonuses, such as:
Creative industry expertise from a finance professional who understands the creative mindset, the agency market and the business challenges you may be facing.
Drilled down strategic support to evolve your business model, improve the efficiency of your finances and enhance your internal drivers.
Flexible access to a whole finance team to take on your financial management, freeing up your own staff for creative tasks, client meetings and sales.
That last point is of huge benefit for a busy agency. Outsourcing your day-to-day financial management to an external team is a real game-changer.
4. Access to an outsourced finance team
By opting for an outsourced finance model, you get access to your own virtual FD (with all the strategic benefits this delivers) PLUS the skills of an entire outsourced finance team.
With a ‘Virtual FD + outsourced finance team’ model, what your agency gets is:
Basic bookkeeping and admin done as standard
VAT, corporation tax and compliance taken care of
Payroll outsourced and run each month
Monthly numbers and scorekeeping run like clockwork
Your own one-to-one contact in the practice when you have questions
Access to your virtual FD for board meetings, strategic guidance and ongoing support
It’s a holistic approach to your finances that brings you end-to-end accounting and top-level business advice to drive your agency’s long-term performance.
5. End-to-end financial support for your agency
Your outsourced finance team will cover the accounting basics, intermediate finance jobs and higher-value reporting and scorekeeping – AND bring you the expertise of a virtual FD when you need strategic insight, advice and planning.
If you’re a busy agency founder with a long to-do list, outsourcing your whole finance function is a no-brainer. You can forget about mundane bookkeeping and data entry of expenses and get on with building the business.
And, with access to your virtual FD, you have an experienced finance professional on board who understands the drives of the creative sector – someone who you can turn to when you need support, have a key strategic question or just want the confidence of talking through the next step in your business journey.
Talk to us about becoming your FD
We love working with ambitious creative agencies. And a big part of our approach is to offer your agency the option of your own virtual FD, combined with our outsourced finance package.
Contact us for a chat to talk through how one of our virtual FDs will transform your finances.
You can read the full version of this blog post on the FD Works Insights blog.