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Twelve questions to help you choose the right Finance Director

As the credit crunch deepens and the economy begins to falter, many business owners out there may be thinking that they could use a little help on the finance side from an experienced Finance Director.

But how do you know if the FD that walks through your door is any good?

We've produced a quick guide to picking the right FD. By asking the following 12 questions you should get a pretty good idea if he or she is the most suitable FD for your business:

1. Have they done some upfront research into your business? Good candidates take time to research a business before the initial meeting.
2. Are they interested in learning more about your business? Do they take the opportunity to ask questions of you and your colleagues? Or do they just talk about themselves, never a good sign!
3. How will they plan the business improvement strategy? The saying "If you fail to plan, then you're planning to fail" is so true. Planning is critical. You must be certain that the FD you choose also sees planning as a very important stage in your success journey.
4. How involved are you expected to be? Your commitment to the relationship is critical. Some FDs will work quite happily with minimal input from you, but the better ones will want to work closely with you to ensure business success.
5. What is the cost? Generally you get what you pay for. Choosing the lowest cost option is often a false economy.
6. What do you think sets them apart from other Finance Directors or Finance Director Service providers? The FD who understands his value to your business will easily be able to give you good reasons why you should consider employing him.
7. Do they have the skills needed to handle your business? An advantage of working with a part-time FD service provider is access to a wider skill base of different FDs within the Group with access to the necessary resources and skills as you need them.
8. Can they explain what a Finance Director does? A good FD should be able to explain, in words you understand, how the financial pillars underpin your business and maximise its value.
9. Is there a guarantee or risk reversal proposition? If not - why not?
10. Do they offer proof of their abilities with references, testimonials and case studies? These will give you a clear indication of the type of FD you're dealing with and demonstrate his or her abilities.
11. Are their services confidential? Ask the FD to sign a letter of confidentiality. Alternatively, any letter of engagement put forward by a good FD service will deal specifically with this aspect.
12. What notice period do you have to commit to? Too long a notice period, say over 6 months could prove very costly for your company, so check what the notice period is.

And finally, in addition to the questions listed above, you need to draw two conclusions about the Finance Director during the meeting:
Is the FD a good listener?

This is very important. Run the other way from anyone who knows exactly what you want before hearing about your goals, needs and objectives.
Do their ethics and philosophies match yours?

This is essential. To get the best results you must be sure that you are harmonious in these two areas with your FD. Any differences here will not be conducive to a happy, productive and lasting relationship!

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