As many private equity-backed companies begin very small, their finance functions are often performed by the CEO or Founder(s) in the early days and get gradually outsourced as the company begins to grow and the finance functions get more complicated. However, at some stage, scale ups need to make the decision to bring their finance and accounting functions in-house and incorporate it into the heartbeat of the company.

One of the hardest things to plan for though can be matching your finance team hires with a fast-paced growth model. Taking on more business or implementing innovative systems and technologies can change the finance needs of your business very quickly, which is why having a strategy for talent acquisition that aligns with your overarching strategy is important!

The link between your strategy and your plans to scale up might seem obvious but having the right finance and accounting hires in place at the right time can make the process much easier, from securing investor funding to bringing a product to market.

The key ingredients for a high-performing finance team:

There are a few activities every private equity-backed company should try and accommodate when it comes to scaling up their finance team and these include: securing investment and backing, cash flow, payables, forecasting, reporting and analysis.

In the initial stages of building a finance team, utilising interim resources can be an ideal way to build an operational and adaptable finance function whilst also helping align it with your overarching strategy for growth. From there you can scope out the permanent hires you will need to support these functions.

For example, one way to shore up your ability to secure investor backing and capital is to invest early on in an internal audit hire who can manage stocks, controls and testing. This could be achieved with an interim finance director with previous experience in preparing for funding rounds.

An operational accountant can help support the cash flow, payables, receivables, and oversee forecasting, reporting and analysis to free up time for founder(s) or CEOs to focus on commercial-facing activities.

What to do about your Chief Financial Officer (CFO)

It can be a tricky business bringing in a CFO when building your finance team as you scale up. There are arguments for bringing them in earlier as well as later on in the scale up process:

• Pros of hiring a CFO early:

CFOs with proven fast growth backgrounds can help advance the scale up process rapidly as they are often experienced in outlining effective financial and business strategies and will know what types of roles and talent they will need to achieve this.

• Cons of hiring a CFO early:

However, hiring your CFO too early can mean that they are overly involved in the day-to-day finance functions like payroll, cash management, tax and credit control – which means they’ll have no time to work on important planning and analysis. When every hire counts and a CFO is potentially your most costly finance and accounting hire, this could make them a drain on resources that could be better utilised elsewhere.

• Pros of hiring a CFO later:

Hiring a CFO later on when you’ve already scoped out what you’ll need from your finance function can make it easier to find the optimal hire. The CEO or the founder(s) will have a greater understanding of what skills and competencies it requires to run their finance function – having done it themselves in the meantime – and will know what they’re looking for.

• Cons of hiring a CFO later:

When you hire a CFO after you’ve built your finance function and a significant part of your finance and accounting team, you will have missed out on invaluable insight from having an experienced CFO during the recruitment process.

At Haig&Co we work with scale up companies to assess their finance team requirements and can provide a combination of permanent and interim hires to support your finance function at every stage. We can also advise on when and how best to choose those senior hires based on your unique requirements.

Measuring the performance of a scale up company’s finance team:

Measuring the performance of your finance team will involve making sure your finance functions match the priorities set out in your strategy and business plan. This could mean creating KPIs based on growth, margins, repeat customers, sales, cash flow and output – this would depend entirely on the business and industry. Having scheduled, regular reporting that looks into these KPIs will help you assess your finance team’s performance and allow for any adjustments to be made.

If you’re looking for a few tips and pointers to build a finance team that reflects your current and future needs – and even help onboarding new permanent or interim employees remotely – please get in touch! We can also map out what you may need from your finance and accounting team in the future and can shape a talent acquisition strategy to achieve it.

In the face of economic uncertainty, many private equity investors are scrutinising financial data more intensely than before, looking for both the good and the bad when it comes to scale ups.

Many of these firms were affected by bad investments made in the last global recession in 2008 and are right to be wary, indeed 79% of the companies in their portfolio had previously presented them with incorrect financial data. However, the current market also presents an exciting opportunity for private equity firms to take over many companies that have been affected by the pandemic but still have a high projected prospective yield for years to come.

There are no two ways about it, the market is open for investments, but the conditions have to be just right. This means your company needs to be in the optimal shape for investors will need to know the ins and outs of your plans, projections and due diligence.

The current attitude to investing in scale up businesses:

Many scale ups are finding themselves in the unfortunate position of paralysis by analysis. This means their investors are asking for so much information to be presented that it immediately becomes outdated as soon as it’s submitted, or they are repeatedly asking for updates from multiple departments so no one can get any work done!

It’s a bit of a rock and a hard place situation for many venture capital or private equity backed companies, as investor funds are vital to supporting plans to scale up and the increased scrutiny and reticence is the price you have to pay. However, if your entire workforce is busy trying to find the perfect way to satisfy investor scrutiny, no one has time to work on scaling up and working on talent acquisition plans – which will significantly stall development.

How to secure investments in the face of uncertainty:

Whilst this may seem like an inescapable catch-22 situation, there are a few things you can do to put your investors at ease, secure your funding and be able to progress with your plans to scale up and get the talent you need for the next stage of your business.

• A sound business plan

Whilst business plans are often seen as a key factor in the initial seed-investment phase, having a detailed plan that clearly outlines both the strategic and tactical approaches as well as your investment requirements will go a long way to ease investor uncertainty at every stage in the process. Having a timeframe in place for how to re-earn that investment back based on accurate projections from previous performance, that still accounts for the current market fluctuation, will also providing reassurance.

• The right technology and systems in place

The name of the game when it comes to private equity investment firms is accurate and up-to-date data. The best way to prove that you can produce this is to have forward-thinking technology and systems in place to capture the current state of your business.

This is particularly crucial when it comes to financial technology as 92% of investors agree that real-time visibility over finance functions will be critical to keeping your business model cutting edge in the foreseeable future.

Investors are particularly encouraged when they see that there is a good backbone of technology in place, with as many as 69% believing artificial intelligence (AI) and machine learning will one day lead to better accuracy and transparency in finance and reporting.

• A good understanding of the talent you need at every stage as you scale up

The size and skill sets in your finance and accounting team will depend on your unique requirements at important milestones in your business achievements. However, having a plan in place of exactly what skills and resources will be required throughout your growth journey will give you a better understanding of where you’re going but will also reassure your investors that their investment will be protected and used effectively to yield ROI. Having a detailed talent pipeline of what roles and skill sets will be required – and when – is a key component of this.

If you’re looking for a few tips and pointers to build a finance team that reflects your current and future needs – and even support with onboarding new employees remotely – get in touch! We can also help you map out what you may need from your finance and accounting team in the future and can shape a talent acquisition strategy to achieve it.

We are of course referring to the ‘furlough’ scheme set out by the government and the dreaded ‘redundancy’ discussion. Now that everyone has gotten over the initial excitement of being put on a paid, or partially-paid holiday as businesses try to conserve cash flows and resources, it’s time to talk about the harsh reality of what’s going to happen next.

With the very real possibility of mass redundancies on the horizon, the recruitment market is going to see some wild fluctuations that will affect businesses into 2021. The Government’s Job Retention Scheme was initially introduced to support businesses through what was only meant to be a brief economic downturn that would have a fast bounce back. However, as another recession becomes a real possibility, this could mean that many on furlough who thought their jobs were safe may find they have no job to come back to.

How has the furlough scheme affected finance and accounting departments?

Businesses of every size have been affected by the Coronavirus crisis, with Big Four firms even slashing their partners’ pay by up to a quarter whilst their rivals furlough large amounts of junior staff. Every organisation is now closely assessing each individual’s contribution to a team or the company at large in a bid to balance the need to protect both employees and cash reserves.

Many finance and accounting departments have proven themselves to be highly adaptable and essential arms of a business despite furloughed colleagues in their team and in the front office functions. Finance teams have shown that they can be smaller and more efficient, if they’re made up of the right people.

Last in first out isn’t necessarily the game here, businesses are being more analytical about the personal worth of each employee. Although there are negative aspects too as even senior management aren’t safe and may find themselves under consultation.

In this way the furlough scheme can be used to drive long-term efficiency within an organisation as it could be used to test and experiment with which employees, skills or competencies are essential for future growth and stability.

What will the long-term outcomes be from another wave of redundancies?

Some industries are more affected than others but most have accepted that we live in a new world with a different attitude to the way we work. Social distancing may have to be in place in some form or another for months if not years to come which means many will not be able to return to business as usual and could be facing redundancy.

According to the Organisation for Economic Cooperation and Development (OECD), the UK could be facing a further 15% rise in unemployment if a second wave of the Coronavirus occurs. The long-term affects of this could be a shift towards higher employment rates in technology and e-commerce related industries whose agile business model has skyrocketed sales and success during the pandemic. Whilst hospitality and tourism could see a further hit in coming years as people are wary to go back to previous habits.

It’s easy to see the correlation between the rise in cloud-based technology and a change in attitudes towards working in finance and accounting. Employers should be looking for those individuals who can combine their technical finance and accounting skills with greater IT-literacy and a pro-learning attitude. As finance teams might be smaller and more efficient in the short-term future, attractive candidates will be those who provide a broad range of skills and competencies that suit a more agile and tech-savvy way of working life.

If you’re looking for a few tips and pointers to help build that finance team that reflects your current and future needs – and even help onboarding new employees remotely - we’d be happy to help! We can also help you map out what you may need from your finance and accounting team in the future and can help shape a talent acquisition strategy to achieve it.

Finance leaders are facing a quandary: they must balance the need to be adaptable to capitalise on any emerging opportunities, with the need to be able to revert back to crisis management should further economic uncertainty resume. It’s a challenge that all businesses are facing, with finance firmly positioned at the fore of the decision-making process.

This means there will be a greater attitude of flexibility towards building the optimal finance team and functions, leading to a greater use of contingent staff. In a nutshell, interim and temporary staff are a cost-effective way of shoring up your finance team and allowing you to make solid business decisions and secure future growth and stability for your organisation.

Contrary to popular belief, the benefits of employing contractors far outweigh the seemingly high day rates that put many employers off. Employing an interim for a set amount of time is a cost-effective means of gaining all of the insight but none of the drawbacks of hiring a senior-level permanent employee such as:

• · Tax and pension contributions

• · Full, yearly salary pay

• · Providing software and equipment

• · Providing potentially time-consuming training schemes

Temporary or ‘contingency’ staff allow for a faster return on investment and can be deployed to fill very specific needs your finance and accounting team may have in order to tackle what comes next.

Why are interim and temporary staff key to financial opportunity?

Finance and accounting functions are regularly thrown into uncertainty by changing regulations or legislation, IR35 and Brexit being two recent and notable examples. Being able to quickly and efficiently adapt to these changes by plugging skills gaps or providing additional support where needed are the mark of a strong finance and accounting function. Temporary and interim staff are invaluable resources for dealing with these kinds of adjustments as they can implement high-level finance and accounting reporting, freeing up senior and executive-level employees to focus on strategy or delivering large-scale change.

Similarly, due to the uncertainty caused by the pandemic, most organisations will have the mandate to seize every opportunity they possibly can in the years to come. This means looking to develop large-scale projects like implementing new systems or technology, or mergers and acquisitions. Deploying qualified finance and accounting interims can help to either spearhead these operations using their experience and in-depth industry knowledge, or can support the longevity of these projects by imparting long-term systems knowledge on the permanent staff who will be present after the project is completed.

One of the many benefits of temporary or interim staff is that they are used to onboarding and integrating into existing work cultures, systems, and processes and can hit the ground running with a wide range of software. This means they can plug a skills gap in the most efficient way possible, allowing organisations’ finance functions to evolve and adapt quickly to meet the demands of changing markets.

A track record of support

In 2008 the world went through an economic downturn that, although it had hugely different causing factors, had outcomes that are not dissimilar from the economic climate of 2020.

During the 2008-14 recession there were significant changes to the employment market with many businesses choosing to use the butcher’s cleaver rather than the surgeon’s scalpel when it came to pairing back resources; this resulted in many jobs lost.

The Office for National Statistics released information that suggests the 2008 recession’s impact on the world of employment led to a rise in limited companies and contract employment as a means of keeping overheads low for businesses while they recovered. At the start of the financial crisis in 2008, there were 3.9 million people working for themselves, making up around 13% of the overall workforce. Over the course of the next few years this would become an increasing trend and by June 2014, 4.6 million people were self-employed in the UK – the equivalent of 15% of the entire UK workforce.

This trend gave rise to the concept of the Gig Economy, a labour market characterised by an increased amount of contract or contingency employment that allows employers to fill skills gaps for set amounts of time and money, and allows independent contractors the flexibility to develop their careers based on the most attractive contracts or ‘gigs’.

Given the economic forecasts that predict a continued economic downturn that could last well into 2021, it is very likely that contingent finance and accounting professionals would be able to support businesses through another global recession.

A vision for the future:

From a finance and accounting point overview, contractors are a short-term solution to a mid to long-term problem but can lay the ground for even longer-term solutions.

Interim or temporary staff are able to be deployed at senior management level or on a consultancy basis and are able to help shape or implement strategic overhauls of current processes as they are not afraid of ruffling feathers. This means they can contribute objective and useful insights that may outline difficult decisions with clear choices.

If you’re looking for a few tips and pointers to build a finance team with the perfect balance of interim and permanent staff that reflects your current and future needs – get in touch! We can help you map out what you may need from your finance and accounting team in the future and can shape a talent acquisition strategy to achieve it.

Working out what a business needs to handle whatever the market is going to throw at us next is a tricky business in itself. Because we can’t know what’s coming for sure, organisations need to be driving towards growth with strong investments, deals, mergers and acquisitions to ride an economic upswing, whilst also being simultaneously prepared for further uncertainty and upheaval.

In order to accommodate this potential for rapid growth coupled with the potential for further ‘battening down the hatches’, business leaders are going to have to invest time and resources into mapping out the future and its requirements, and many might find that this means a more efficient set of skills on their finance and accounting teams.

How to survive an economic crisis? … Planning!

In a recent webinar with Haig&Co, C-Suite Partner and Strategist, Henry Fairpo of Castaing Group outlined some very important considerations that every business leader should adopt to prepare for what may arise in the future. These include:

• · Having very clear objectives and goals to achieve

Although every business should have clear plans and goals of what they expected to achieve based on last year’s projections, these will have to be reassessed to make sure they are align with what’s achievable in the current climate.

Once you’ve outlined these objectives you can assess what resources you have to achieve them.

• · Having the right people in the right roles at the right time

Your workforce is your greatest asset and resource to achieve your objectives. Assessing the skill sets you currently have within your finance and accounting team will help you define the building blocks you require to achieve your goals. Creating teams of highly-skilled finance professionals who have the confidence to question the status quo and point out inconsistencies will make sure you’re on the path to actually achieving your goals and not fall at the first hurdle.

Your finance and accounting team are going to play a huge part in achieving your goals, so share your vision with them and help them creatively find solutions and actions to take. Having those goals and objectives outlined but not mapped out in concrete steps will allow your team to develop a flexible model to achieve those goals.

Oftentimes the plan overtakes the goals and objectives as the main priority, and may have deviated due to oversight or new, unforeseen developments leading to outcomes that differ wildly from the original objectives. To tackle this, you need to make sure the goals are always at the forefront of your finance team’s priorities, with an attitude of flexibility and adaptability to the plan as long as it comes back to achieving those objectives and goals.

• · Being resourced for need not risk

The recent economic uncertainty has pushed many organisations to only focus on crisis and risk management within their finance functions with forecasting and financial planning being manipulated to only account for further reduced resources and cash flow.

What could be more helpful, however, is to plan for the actual ‘needs’ of the company based on up-to-date business intelligence and financial analysis so you don’t undermine your requirements by not allocating enough revenue or financial backing.

How to address a lack of resources or a skills gap in your finance team:

To be successful, it’s critical for finance departments to have two things: 1) access to the right financial software or ERPs that enable meaningful data and insights, and 2) access to the right talent and skills to make this data come to life. If they don’t exist in-house, then acquiring them – especially during a period of financial uncertainty – can seem like a daunting prospect. However, not having them may be even scarier with a longer-term and a more profound impact.

Getting in touch with a specialist finance and accounting recruitment agency can help you assess your immediate and long-term needs as well as keep a mind open to the future. Recruitment consultants can help you make a plan to fill skills gaps quickly and cost effectively. They will help you identify talent with the right skills and experience that align with your ultimate goals and objectives to see you through whatever comes next!

If you’re looking for a few tips and pointers to build that finance team that reflects your current and future needs – and even support with onboarding new employees remotely – get in touch! We can also help you map out what you may need from your finance and accounting team in the future and can shape a talent acquisition strategy to achieve it.

Whilst the dawning of a new decade was bound to bring with it some advances in finance and accounting technology, nobody could have predicted that it would come with so many changes and upheavals, including the way we work! Finance and accounting departments have seen a dramatically rapid shift towards flexible working through increased digitisation, with many positive but unforeseen outcomes. But how viable are these changes for the future?

The answer to this question will depend on the individual company or business, size, industry and many other factors, but what is clear is that the finance and accounting function of the future will benefit from keeping some of the flexibility and innovation experienced during those months of the pandemic.

How have things changed for finance and accounting?

Changing attitudes

One of the most important changes brought about has been the mass shift to a working-from-home approach. Previously, flexible working could usually only be enjoyed as an employee progressed through the corporate ladder, where trust went hand in hand with seniority. But Covid-19 has proved to be the catalyst for one of the most monumental shifts in attitudes towards working in finance and accounting: allowing junior employees to work from home.

Junior finance employees – as well as more experienced finance employees – have risen to the challenge, possibly through their greater levels of IT literacy which allowed them to utilise cloud-based technology and operate just as effectively as they would in the office. Indeed, the need to embrace technology this year has accelerated 75% of companies’ technological transformation, according to a survey of Fortune 500 CEOs.

More value seen in finance functions

As productivity levels exceed expectations and finance and accounting teams efficiently work to protect cash reserves and enact crisis management over existing finance functions, the importance of many organisations’ finance teams has increased.

Finance and accounting teams are working hard to provide real-time data, harnessing automated processes and AI to create accurate business analytics and on-the-spot financial reporting so that companies can get an accurate picture of the current state of their organisation to make informed decisions. Forecasting, risk assessment and financial control have become prioritised finance functions that depend more heavily on technology than ever before.

In order to facilitate this new skills requirement in response to economic uncertainty, some employers have successfully adapted to interviewing and even onboarding new finance and accounting professionals into their teams remotely using video conferencing technology.

New skills emerging

Where new finance and accounting employees have been onboarded remotely, new skills have emerged. It takes a special type of confidence to be able to insert themselves into a conversation or team project in the office when starting a new job, let alone having to do it via chat functions like Slack, Microsoft Teams or Skype Business, etc., often without the formality -- and utility – of a real introduction. Greater importance is now placed on the ability to proactively communicate with new colleagues and management.

Which changes are here to stay?

Many organisations have had to recognise that flexible working is a viable option for their staff. Indeed, many big organisations have even announced that they will keep working from home in place until January 2021, including the tech giants like Facebook, Twitter and Google.

This has led to an interesting rise in the concept of Work From Anywhere (WFA) policies, where the geographical proximity of an employee to the workplace is no longer important – all they need to be a part of the team and to do their job is a working internet connection. Automattic, the parent company for WordPress.com and other platforms, has always had this in place for its employees with great success. Even Barbados as a country is taking advantage of this trend by allowing for people to come to live and work remotely for up to a year.

For some organisations looking to dramatically scale up, flexible working and onboarding may not be an appropriate option when looking to coordinate large finance and accounting teams across complex functions. However, for many smaller organisations the incredible advancements in technology that enable staff to work from home, maintain some amount of flexibility and agility in working, interviewing and onboarding, could be a permanent feature of the future.

If you’re looking for a few tips and pointers to build that finance team that reflects your current and future needs – and even support with onboarding new employees remotely – get in touch! We can also help you map out what you may need from your finance and accounting team in the future and can shape a talent acquisition strategy to achieve it.