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27 tips on hiring a top FD

6 Mins

1 Don’t wait around

“You should recruit a financial director as soon as possible,” advises Catherine Lister, marketing director at Instant Offices. “We went for eight years without one but we got to a size where not having a proper finance department was holding us back. If you don’t have an FD, the CEO ends up knee-deep in finances instead of spending time driving the business forward.”

2 … but hire in stages

“I’ve found that each stage of business growth requires different skill levels from the finance function,” says Martin Leuw, founder of Iris, the UK’s largest private software house. “Using a very rough rule of thumb, from nought-30 employees, a competent book-keeper should suffice; from 31-100 employees you’ll need an accountant plus some support from a FTSE-100 finance director. Your needs will increase from purely keeping the books to a broader commercial role covering management information, forecasting, IT, tax, financing and back-office support. The key is to anticipate the next stage well before you reach it, as failure to do so can be painful for you and the business. There are too many horror stories of successful businesses running out of cash or entering onerous contracts.”

3 Know the numbers

“A good FD will help you to better understand the profitability of all your individual activities and reward your talent according to their contribution,” says Lister of Instant Offices. “Everyone at Instant knows their break-even point each month and what they need to do so that we hit our company goals.”

4 Consider part-time appointments

If you don’t need a top FD right away, hire a high-calibre, ambitious financial controller who is prepared to get into the detail initially, but has the ability to move up to a more strategic FD role within 12 to 24 months. Or follow Lara Morgan’s method and hire a super-hot FD on a part-time basis: “I started with a one-day-a-month input from Nigel Alldritt, a world-class independent FD,” says Morgan, CEO and owner of toiletries manufacturer Pacific Direct. “Through his expertise in negotiating with banks, invoice discounting rates and other contractual expenditure, he more than covered what I thought then was an outrageous cost. On reflection, employing him part time was one of the best investments I ever made.”

5 Get another FD involved

“Ask another financial director to join you in part of the interview to ask the technical questions,” advises Duncan Cheatle, founder of The Supper Club, a networking group for entrepreneurs. “It takes one to know one.”

6 Know your acronyms

Look for the right acronyms after the name. FCCA (that’s a Fellow of the Association of Chartered Certified Accountants) will mean the person has the accounting knowledge, skills and professional values needed to be a successful FD, no matter what sector they work in.

7 Make sure they develop their skills

“For an FD to remain on top of their game, ongoing development is essential,” says Andrew Leck, head of the UK’s Association of Chartered Certified Accountants (ACCA). “All ACCA members are required to undertake relevant Continuing Professional Development each year to make sure they maintain and develop their knowledge and skills.”

8 Check their connections

“A sound FD will also have useful contacts, including relationships with bank managers and potential investors,” points out Russell Wynn-Jones, director of London-based accounting services firm Helm Financial Management.

9 Personality counts

A really good FD should be the number two to the CEO or managing director – so personal chemistry is vital. “Being a sound beancounter, however well qualified, is not enough – wallflowers need not apply,” says Leuw of Iris. “You need someone with a strong personality who isn’t afraid to challenge the head honchos – someone who will spot the small black dot on the horizon signalling bad weather on days when everybody else is enjoying the sunshine of business growth.”

10 Check their references

Iris’s Leuw says his most successful FD hires have been through personal recommendations from business contacts he trusts and admires. Nevertheless, he reference-checks candidates very thoroughly. “One of my investors said that he always asks for ten references. Most people can find a few people to say good things about them, but only the really good ones can deliver ten excellent references.”

Read more tips on page two

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