Often with a professional accountancy qualification and an inherent knowledge of the organisation, the Finance Director is more than capable of looking after its financial management and reporting needs for their organisation or business.
To a Finance Director, the role of an external accountant can often be seen as limited, carrying out audit and assurance work. Unfortunately, the true value of the relationship can be overlooked.
In particular, the FD can benefit greatly from the accountant’s knowledge of the rigorous and complex tax regime, offering advice through tax mitigation, deferral and planning schemes which are all inevitably linked to business trading activities. Areas such as property matters, director’s remuneration and the acquisition or disposal of business interests are also areas the FD can benefit from through professional advice.
Finance Directors within larger corporate concerns will find their role even less straight forward, often dealing with the corporate entity including divisions, holding companies and group structures. Issues such as these tend to lead to the need for greater guidance and clarity on inter-company trading activities, charges, fund transfers and profit management. The role of the accountant is to assist the FD with the legalities of both company law and accounting standards.
In supporting the FD, the accountant’s work often involves financial accounting matters including long term financial planning focusing on business strategy and the provision of external finance, including asset based finance and working capital requirements. Through frequent dealing with financial providers the accountant can be a real benefit to FDs in determining the provision of finance and in obtaining the best deal.
The FDs fellow directors will, no doubt, be seeking advice on aspects of their personal finance not least director’s remuneration, personal tax planning and investment advice. External advice is beneficial in such situations, especially if this includes access to independent financial advice involving investment and pension planning.
There is much more to gain from the FDs relationship with their external accountant than just simply a ‘nice’ set of accounts completed and filed in a timely and efficient manner and the satisfactory completion of the company and directors tax returns.