At some point, most growing businesses hit a familiar wall. Sales are up, the team is bigger, and you’re busy... but your confidence in the numbers hasn’t grown at the same pace. Cash flow feels unpredictable. Profit looks “fine” on paper, yet your bank balance tells a different story. You’re making bigger decisions (new hires, new locations, new offers) without a clear financial roadmap.

That’s usually when the thought pops up: “Should we be hiring a finance director?”

A Finance Director (FD) can be a game-changer. The right person brings structure, clarity, forecasting, and strategic thinking. But for many SMEs, hiring a finance director in-house is expensive, hard to recruit for, and if we’re being honest often more than you need at that in-between stage.

That’s where a Virtual Finance Director (Virtual FD) comes in: the benefits of a senior finance brain, without the full-time salary and overheads. In this blog, we’ll break down when a finance director is worth it, what you actually need (and when), and why many UK businesses now choose a Virtual FD as the smarter, more flexible alternative.

What Does a Finance Director Actually Do?

Before you decide whether hiring a finance director is worth it, it helps to understand what an FD does in reality, not just in job descriptions.

A Finance Director isn’t simply “someone who looks after the accounts.” They’re responsible for steering the financial direction of the business and turning numbers into decisions.

A good FD typically covers:

Strategic finance

• Creating and managing budgets

• Building financial forecasts (and updating them regularly)

• Scenario planning (best case / worst case / realistic case)

• Advising on pricing, margins, and profitability

• Funding strategy: loans, investors, cash reserves, working capital

Cash flow control

• Managing cash runway

• Improving debtor days and credit control

• Mapping out seasonal cash dips and planning for them

• Making sure VAT, PAYE, and Corporation Tax don’t land as nasty surprises

Management information (MI) and reporting

• Monthly management accounts that actually mean something

• Key performance indicators (KPIs) linked to the business plan

• Department or service-line profitability

• Dashboards that help you make faster decisions

Operational finance and risk

• Improving internal controls

• Reducing financial leakage (waste, overspend, pricing gaps)

• Ensuring compliance and reducing HMRC risk

• Supporting contracts, procurement, and cost negotiations

Leadership support

• Translating finance into plain English for the leadership team

• Acting as a sounding board for the director/CEO

• Helping you avoid expensive decisions made on gut feel alone

Signs You Might Need FD-Level Support

You don’t need FD support just because you’re “growing.” You need it because growth introduces complexity, and complexity without financial control leads to chaos.

Here are the most common signs it’s time to consider hiring a finance director (or using a Virtual FD):

You’re profitable, but cash is tight

This is a classic one. It usually points to timing issues (late payments, stock, VAT, big overheads) or poor forecasting.

You can’t confidently answer:

• “What will our cash position be in 90 days?”

• “Which service line makes the most profit?”

• “Can we afford to hire without stretching ourselves?”

You’re making big decisions without proper modelling

New staff, new premises, big supplier commitments, investment in equipment, these decisions need scenario planning.

Your bookkeeping is “fine,” but reporting is weak

You might have Xero up to date, but you still don’t have clear monthly insight into how the business is performing. Bookkeeping is history. FD support is forward-looking.

Your business is relying too heavily on you

A finance director helps take the mental load off the owner, especially when the business is doing enough turnover that “winging it” becomes risky.

You want to grow profit, not just revenue

More revenue isn’t always better especially if margins are thin. FD support helps you grow the right way.

The Real Cost of Hiring a Finance Director In-House

Let’s get into the numbers, because this is where business owners often pause.

A full-time Finance Director in the UK is a serious investment. Salary varies by region and industry, but you’re often looking at a high five-figure to six-figure salary, plus employee costs.

When you consider hiring a finance director, the cost isn’t just salary. You also have:

• Employer’s NIC

• Pension contributions

• Benefits

• Recruitment fees

• Onboarding time

• Training and integration costs

• Software, equipment, systems access

• The risk of hiring the wrong person (which is very expensive)

And here’s the important bit:

Many SMEs don’t actually need an FD 5 days a week

What most growing businesses need is senior finance thinking 1-4 days per month, or perhaps 1 day per week, depending on complexity.

So you end up paying for capacity you don’t use, or worse, you hire too early and it strains cash flow.

What Is a Virtual Finance Director (and What Do They Actually Deliver)?

A Virtual Finance Director is exactly what it sounds like: FD-level expertise, delivered part-time, remotely, and tailored to your business.

It’s not a junior accountant doing a few spreadsheets. A proper Virtual FD service provides:

A financial plan you can actually run your business on

• Budgets aligned to your goals

• Forecasts updated regularly

• Clear monthly reporting

• KPIs tied to real decision-making

Cash flow control systems

• 13-week rolling cash flow forecasting

• Debtor management and cash collection strategies

• Tax forecasting so you’re not shocked by bills

Profitability and pricing insight

• Service-line margin analysis

• Cost tracking and cost reduction strategy

• Pricing reviews to protect profit

• Help restructuring packages so your offers are commercially strong

Ongoing strategic support

• Decision modelling (“If we hire this role, what happens?”)

• Planning for funding applications

• Board-level input without board-level salary costs

A calmer owner and a stronger business

This is underrated. A Virtual FD reduces financial uncertainty, which reduces stress and improves leadership decision-making.

Virtual FD vs In-House FD

Let’s keep this simple.

An in-house FD might be right if:

• You’re a larger SME with complex operations

• You need daily finance leadership (multiple departments, entities, reporting lines)

• You’re preparing for investment, acquisition, or exit at scale

• You already have a strong finance team underneath them

A Virtual FD is often best if:

• You want strategic finance support without full-time cost

• Your biggest issues are forecasting, cash flow, and profitability

• You need help turning numbers into decisions

• You want flexibility (scale support up or down as the business evolves)

• You’re not ready to recruit, manage, and retain a senior role

For many businesses, the Virtual FD is a bridge: you get FD-level support now, and if you outgrow it later, you’ll be in a much better position to hire in-house because your systems and reporting are already solid.

What a Virtual FD Helps You to Fix

If you’re unsure whether hiring a finance director is worth it, here are the practical outcomes Virtual FD support can deliver within the first 60–90 days:

1. You know your numbers (properly)

Not just turnover. Actual profit, margin, cash position, and runway.

2. Your pricing becomes more deliberate

You stop guessing and start pricing based on cost, value, and capacity.

3. You reduce waste and financial leakage

Subscriptions, overheads, inefficiencies, contractor spend—these get reviewed and tightened.

4. You make decisions with confidence

Instead of “I think we can afford it,” you’ll have models and forecasts showing what happens next.

5. You stop being surprised by tax

Tax becomes planned and ring-fenced, not feared.

6. You build a business that can scale

Systems, reporting, and financial rhythm are what make growth sustainable.

What to Look for in a Virtual Finance Director Service

Not all Virtual FD services are created equal. Look for:

• Experience with your size of business and sector

• A clear onboarding process (not “we’ll figure it out”)

• Regular reporting cadence (monthly/quarterly)

• Strong forecasting capability

• Plain-English communication

• A proactive approach (they bring insights, not just respond)

• Tools and templates to keep reporting consistent

• A focus on profit and cash - not just compliance

Ask:

• “What will I know in 90 days that I don’t know now?”

• “How often will we review forecasting and cash?”

• “What does success look like with you?”

Sometimes, yes. Hiring a finance director in-house can be transformational if your business genuinely needs full-time senior leadership and has the infrastructure to support it.

But for a huge chunk of UK SMEs, the smarter step is a Virtual FD:

• You get the strategic insight

• You improve cash control and profitability

• You make better decisions

• You avoid the cost and commitment of a full-time role

And most importantly: you get financial clarity without waiting until you’re “big enough” to deserve it.

If you’re feeling like the business is growing but the finances aren’t keeping up, that’s your sign. You don’t necessarily need a full-time FD sitting in your office. You need a finance leader in your corner, helping you plan, protect profit, and move forward with confidence - and this exactly what our Plan for Profit service provides, find out all about it here.