At Intelectium, we are aware that, at present, SME managers dedicate a large part of their time to administrative and financial tasks that do not bring them any kind of benefit and in which they are not specialized. As an alternative to hiring a fixed and high-cost resource for the company, we offer the service of External Financial Director for SMEs. But why is it more beneficial? What advantages does it offer?

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In today's article, we summarize its main tasks, advantages it provides and its relevance within the company.

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What does an External Financial Director do and why can it be important for the growth of your SME?

An External Financial Director plays a central role in financial management, responsible for strategic planning, cash management, cost control and financial analysis. In addition, it oversees the relationship with banks, seeks funding when necessary, and ensures legal and fiscal compliance. The company's Chief Financial Officer evaluates investments, improves internal processes and, if the company grows rapidly, leads and develops an internal financial team. Maintaining good investor relations, negotiating financial agreements and planning long-term financing strategies are part of their responsibilities. In short, its role is crucial in balancing financial stability and SME growth, suggesting informed decisions and adapting management to the company's changing needs. The problem with small and medium-sized companies is that they often cannot afford a Chief Financial Officer because of their high salary cost. In these cases, the figure of External Financial Director is presented as a very good alternative to solve this problem, since its cost is much more adapted to the size and needs of the company, making access to first-level financial experience and knowledge cheaper for SMEs.

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Benefits of having an External Financial Director for your SME

• Cost reduction: There is no employment contract, the costs are only for an external service.
• Release of resources: And, above all, time for the General Manager or CEO so that they can dedicate themselves to the business, handing over the financial part of the company to experts.
• Access to experience and expert financial knowledge: Which will maximize the company's growth options.
• Faster and more reliable access to financial institutions: With which the External Financial Director already has previous contact and relationship, achieving better conditions of access to finance.
• Real-time monitoring of the company's economic situation: Allowing us to see where society is going and how to improve its performance.
• Smooth company growth: The company's management and employees can dedicate themselves exclusively to the tasks they perform best, knowing that in the financial field the company is in the hands of a person who is an expert in the field.

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What tasks does an External Financial Director perform?

Financial Planning:

• Development of key tools for financial management: Development of a Financial Model that allows us to simulate and project the future performance of the organization.
• Investment Strategy Development: Identifying investment opportunities that support long-term growth and profitability.
• Risk Management: Assessment of financial risks and development of strategies to mitigate them, protecting the company's assets and financial stability.

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Reporting:

• Operational Performance Analysis: Evaluation of the operational performance of SMEs, identifying areas for improvement in efficiency and productivity.
• Communication with Stakeholders: Maintaining effective communication with investors, banks and other stakeholders, providing clear and transparent financial reporting.

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Forecasts:

• Evaluation of Financing Alternatives: Exploring options such as loans, investors or lines of credit, to meet the company's financial needs in the short, medium and long term.
• Tax Optimization: Implementation of fiscal strategies that minimize the tax burden of SMEs, maximizing available resources.

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Funding Strategy:

• Negotiation of Financial Agreements: Effective negotiation of financial agreements with banks or other strategic partners to obtain favorable conditions.
• Diversification of Funding Sources: Search for opportunities to diversify funding sources and reduce dependence on a single source.

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Process Improvement:

• Identification and execution of improvements in financial processes.- Automation of repetitive tasks.

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Legal and Regulatory Compliance:

• Audits and Compliance: Coordination of internal and external audits, ensuring that the company complies with all accounting regulations and standards.
• Contract Management: Review and management of financial contracts to ensure compliance and mitigate risks.

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Profile of the External Financial Director

• Education and Experience: A Financial Manager should be a university graduate with a degree (s) in business administration, finance, accounting or related areas. Prior experience in financial roles and a track record of making successful decisions are valuable.
• ‍Analytical Skills: They must be able to analyze complex financial data and draw meaningful conclusions to support business decisions.
• ‍Communication Skills: The ability to effectively communicate financial information to non-financial individuals is also essential.‍
• Change Management: As companies are constantly evolving, Chief Financial Officers must be able to adapt and lead financial transformation when necessary.
• ‍Strategic Vision: A good CFO not only focuses on numbers, but they also understand how those numbers relate to the company's overall strategy. Have a broader business vision and understand how financial strategy relates to the company's overall success.

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Do you want to hire an External Financial Director for your company?

From Intelectium, we provide you with an External Financial Director service specialized in SMEs. Through personalized collaboration, you will have an External CFO who will be integrated into the team as another member and with him you will be able to optimize all your financial processes and decisions. From our External Financial Responsible service, we have been able to help more than 50 companies:

• Optimizing your financial and reporting processes, improving your image for obtaining funding.
• Substantially reducing the time spent on financial tasks in the company.
• Extracting the full potential of your product or service to achieve a leading position in your market.

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If you are interested in evaluating the fit of this service with your SME, you can contact us through this form or by sending an email to dealflow@intelectium.com, we will be happy to evaluate your situation and see the option that best suits your needs.

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Success stories: Companies that have contracted the service of External Financial Director with us

Virtual PhD: From Intelectium we have collaborated with PHD as its External Financial Director from its creation until it was acquired by Unitrends (+36 months).

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‍Tradler: Through our Value Accounting service, we offer the company complete management of its financial statements, quarterly and annual accounts, tax filing, payroll preparation, employee registrations and dismissals... But more importantly, we control everything as if we were just another investor and we hold regular meetings with the entrepreneur to analyze the progress of the business and help with decision-making.

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‍Feeder: From Intelectium, we have become Feeder's external CFO, helping them to define a business plan consistent with their objectives that will allow them to accelerate their growth.

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‍Genius HR: Since inception, we have worked together with the founding team of Genius, supervising all accounting, labor, tax and tax aspects of the company, and establishing processes that allow them to grow in a sustainable manner.