Where can we find finance staff?
Online job boards can be a cost-effective way of advertising for employees. For more experienced employees, you may want to consider using a specialist recruitment agency or going through one of the bookkeeping or accountancy associations. Anywhere that has similar job offers to the vacancy you want to fill is likely to be a good source of candidates.
Is it better to build our in-house finance team or use external service providers as much as possible?
Using external service providers can be a very straightforward option, particularly in technical areas such as payroll. As long as you choose the right service provider, you should get a good service with relatively little demand on your time.
Nonetheless, in-house employees can offer some significant advantages. It can be easier to get quick answers, try out new ideas and discuss problems face-to-face. Finance employees can build relationships with other people in your company and develop an in-depth understanding of how your particular business works. If you want someone to be involved in decision making, rather than just providing management reports, you will probably want them to be part of the team.
Finally, there are likely to be areas where you want a level of expertise that you do not need and could not afford on a full-time, employed basis – for example, tax advice.
How can I tell that a new finance recruit is going to be good at their job?
It can be difficult. An appropriate qualification can be a good guide, but you need to think about the softer skills they will need too. How well will they work with the rest of the team, and with customers or suppliers with whom they interact?
It may be worthwhile involving other members of the finance team in the interview process to see how people get along. You may also want to test candidates’ skills and approach: for example, asking them to role-play a phone call chasing up an overdue payment.
Follow up references and recommendations with a phone call. This will allow you to ask for the sort of details that you are unlikely to get in writing. What is the individual really like to work with, what are their weaknesses?
Finally, you may want to bring in an expert to help assess a candidate, particularly if you want to recruit someone whose financial expertise is greater than your own. Specialist recruitment agencies can provide some advice, but asking your own external accountant might be the best bet for a critical appointment.
As with other staff, you may wish to define a probation period that will allow you to assess a new recruit. Three months should be sufficient in most cases.
Is it worth offering our finance employees training and how much will it cost?
Businesses can be understandably reluctant to invest in training, preferring to recruit employees who already have the necessary skills and experience. In a growing business, this can be a rather short-sighted approach. Offering training helps you attract and retain employees. It is also the only way you can ensure that employees’ skills keep up with the changing needs of your business.
A structured training programme working towards a recognised qualification can be a good way of developing finance employees. To an extent, you can control the costs by deciding how much training an employee should have each year. You may also opt for lower-cost training methods such as distance learning. You might decide to budget a percentage of salary for training (say 5%) or to allow employees a set number of study days per year.
It is worth bearing in mind that recruiting and inducting new employees can be expensive and disruptive, so training costs may justify themselves in staff retention alone, without even considering the improvement in employee motivation and performance that you can expect. Also remember that without offering training you may find it difficult to attract the highest calibre of candidates.
What financial software should we use?
The right software depends on your particular business. It is worth taking advice from an expert – your external accountant or a systems reseller. If they do not already know your business and what you want, make sure you brief them properly.
Identify exactly what you want the software to do for you. All software is likely to handle basics such as preparing invoices, routine bookkeeping and tracking your cash position. You will probably also want the software to be able to produce the management information reports you need, cash flow forecasts and budgets, the information needed for tax returns and so on.
Think ahead: how will your needs change as your business grows? And look to building an integrated system. You want it to be easy to share information across your business and with your financial advisers, customers and suppliers.
What sort of financial management reports should we produce?
The key to any successful reporting system is to produce information that is going to be used in decision making. Accounting software can be powerful, allowing you to analyse data in all sorts of ways, but simply producing reams of information is pointless.
At board level, you want a one- or two-page summary of the key information. That should include financial highlights and an assessment of the cash position, along with any key performance indicators you have identified. A report like this makes it easy for everyone to understand what is going on and where further investigation is needed.
Lower down in the business, individuals may want more detailed reports to help them in their work: for example, a daily update on which invoices are overdue.
How can we make sure that the decisions we make are financially sound?
You need finance to be an integral part of decision making, rather than just a way of measuring what has happened after the event. That means making sure all the key decision-makers are given the financial information they need. It also means involving people from the finance team in decision-making groups: for example, by appointing a finance director and by including finance in project management teams.