How To Become A Finance Director In The UK

When it comes to running an effective business, there is one character who will be absolutely essential to that business’s day-to-day success: the finance director.

But what if you wish to become a finance director yourself? If you have a sharp mind, good analytical skills, and great attention to detail, then this could be the ideal role for you, allowing you to be the real power behind many top businesses.

As a finance director in the UK, you will have a lot of responsibility when it comes to the accounts of your clients or the organisation that directly employs you. Not only will you have to help them maintain their budget, but you will need to be ready to talk with stakeholders and help them understand the numbers and what it all means for them.

Most people think that being a finance director is a position that deals with numbers and financial decisions; however, it is so much more than that.

So, here are the essentials of not only what a finance director is, but also what steps you will need to take if you wish to become one – and whether you could truly have what it takes to succeed in this role.

What is a finance director?

So, just what does a finance director do? In the simplest terms, the finance director (FD) is responsible for overseeing the financial health of their company. They are in charge of ensuring that the finances run smoothly, so that they can focus on other aspects of running the business. This means they will be involved with everything from budgeting to cash flow management.

The job title may vary depending on what industry you work in, but the responsibilities remain the same. In any case, you will be expected to manage the finances of the company, including managing budgets, forecasting sales, and making sure money flows into the right places. You will also be required to make sure the company has enough funds to pay its bills and keep up with any debts.

What do I need to do in order to become a finance director?

If you want to become a finance director, it is likely that you will first need to get a degree in a related topic, and good subjects include accounting or economics. After completing your studies, you will need to gain some experience before applying for a position as a finance director.

In the early stages of your career, you will most likely be working as an accountant, which will give you valuable experience in dealing with numbers. You can also get involved in the financial departments of other businesses such as banks, insurance companies, and accountancy firms, and then work your way up through the ranks.

Once you have gained some experience, you will be able to apply for a position as a senior manager at a large organisation. At this point, you will be given more responsibility, and will be in a prime position to take over the role of finance director.

What skills and qualifications does an aspiring finance director need?

To succeed as a finance director, there are a number of skills and qualifications that you will need, or that will at least stand you in very good stead. These include:

  • Good communication skills

To succeed as a financial director, you will need to be able to communicate effectively with people both inside and outside of the company. This includes being able to explain complex ideas clearly and listening carefully when others speak. It’s also important that you can write well and organise information efficiently.

  • Strong analytical skills

It’s vital that you are able to think logically and critically, and that you can analyse situations thoroughly. This means you should be able to spot problems quickly and come up with solutions that will help the situation improve.

You will also need to be able to use data to support your decisions and to understand trends and patterns. This will allow you to predict future events, and plan accordingly.

  • Business knowledge

It’s not just about understanding the finances – you will also need to know how to deal with different types of customers, and how to market products and services. If you don’t know much about marketing, it could be difficult to sell your own product.

  • A degree in business or economics

While having a degree isn’t always necessary, it does mean that you have a better chance of getting a high-level position. However, if you do decide to go down this route, you should choose something related to business or economics, as this will ensure that you have the knowledge you need to excel in the role.

The coursework for such a programme of study will usually encompass topics like accounting, management, and statistics.

How much can you expect to earn as a finance director?

According to Glassdoor, the average salary for a finance director is around £50,000 per year. However, this figure varies greatly from person to person, depending on their level of education, experience, and location. The size of the organisation employing you will also likely impact on the amount you can earn.

5 steps to becoming a finance director in the UK

The position of a UK finance director brings a lot of responsibility. That’s why you will need to slowly work your way up the career ladder in order to become one – and the following steps will help you achieve it.

  1. Obtain an accountancy degree

Unfortunately, you cannot just jump into the position of a financial director. Instead, you need to gain experience before you obtain this type of job. You can start by focusing on learning accountancy.

As a finance director, you will have to work with numbers, accounts, and budgets on a daily basis. Becoming a qualified accountant can help you understand how these figures work, and how you can budget effectively. You can build up your skillset, cementing the basics. That way, later in life, you can move onto more complicated matters.

By becoming a qualified accountant, you can also expand your understanding of the role outside of numbers. It can also help you refine your organisational and time-management skills, as well as what compliance regulations you need to follow. The more you learn about financial support as a student, the easier it will be when you start to progress up the career ladder.

  • Understand other departments

Being a finance director is a lot more than just dealing with numbers on a daily basis. Finance directors need to thoroughly understand the business that they are in. Some may end up in the public sector, while others might serve in private businesses.

No matter where you end up, it is crucial that you understand the other duties of the members of your team. The best finance directors can be empathetic and learn more about the types of employees who are going to be working alongside them.

A business owner may consider outsourcing their firm’s financial director role, because this will give them more options in finding potential employees. However, the best financial directors will have experience of the industry they are in, as well as an understanding of the other jobs of their current employees.

With this understanding in mind, a financial director will be able to understand why they need to budget certain things, and what other tools need to have money spent on them to ensure they can benefit the business in the future.

  • Develop your people skills

When you become a finance director, you need to have social skills to be able to communicate with stakeholders, other team members and investors.

You will find that around 50-80% of your role will be talking to other people and establishing relationships with other businesses and investors. So, you do need to be able to speak to people and help them understand why you have set up your budget in a certain manner. That way, you can also find out what is crucial in terms of spending money, and what you can be a bit tighter about.

  • Get to grips with ERP software

Enterprise Resource Planning (ERP) software is a useful piece of technology for accountants and finance directors to use in their day-to-day duties. This type of software can connect all accounts together, including orders, invoices, and spreadsheets. The finance team can then input all the data efficiently into their business’s system.

As a finance director, you should understand this software. That way, you can make it simpler for you and your accountancy team to monitor invoices and see how your budget is performing. Ultimately, this will make it easier for you and your team to process any future orders.

  • Develop your skills and experience in Excel software

If you intend to be a finance director in the UK, you need to understand how to use Excel spreadsheets. This is not just about inputting data into a spreadsheet. That’s because you need to know how to use it as an advanced tool so that it can be utilised for data analysis.

Are you ready to become a finance director?

Becoming a finance director is an admirable goal, and requires a lot of hard work and dedication. While it may seem daunting at first, once you start applying yourself, you will soon find that it becomes second nature, and this will set you up to really thrive and excel in the role.

Is your organisation in a position where it could benefit from outsourced finance director services? If so, please don’t hesitate to enquire to the Practical CFO team, whether by sending us an email or calling 0800 048 9413.

Making the decision to outsource your firm’s finance director position could help you secure the services of a skilled and experienced person for such a crucial role. At the same time, it would enable you to unlock the flexibility associated with outsourcing, compared to the situation if you tried to employ them on your own payroll full-time.

If, on the other hand, it is you who serves as the finance director for your organisation, you will have a job that is extremely important and could impact the financial future of your company. Learn as much as you can about finance before you begin this career, as it will make a real difference to your on-the-job effectiveness and longer-term professional success.

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