Head of Finance Recruitment: Finding the Right Finance Leader

Welcome to Accountancy Capital, the specialist finance and accountancy recruitment business recruiting qualified finance professionals across the UK.

In this episode, we are looking at Head of Finance recruitment and why getting this appointment right can make a major difference to a growing business.

The Head of Finance is often the senior finance leader responsible for running the whole finance function. But the title can mean very different things depending on the size, ownership and complexity of the business.

For some companies, Head of Finance is essentially a senior Financial Controller. For others, it is the person reporting directly to the Managing Director or CEO, responsible for the entire finance function, cash, budgets, forecasts, the bank, auditors and the finance team.

And sometimes a business thinks it needs a Head of Finance when it actually needs a Finance Director.

That distinction is extremely important.

Accountancy Capital specialises in helping businesses define the role correctly before starting the search.

You can find out more about the service here:

https://www.accountancycapital.co.uk/head-of-finance-recruitment/

WHAT DOES A HEAD OF FINANCE DO?

A Head of Finance will normally take responsibility for the finance function as a whole.

That can include month-end and year-end accounts, management reporting, cash management, banking relationships, budgets, forecasts, audit and the management of the finance team.

But the role is about more than producing accurate accounts.

A good Head of Finance should provide the Managing Director or CEO with financial information that can actually be used to make decisions.

They need to understand what is happening in the business, where cash is going, whether margins are changing, whether forecasts are realistic and where financial risks are emerging.

They also need to be able to explain those issues to people who may not have a finance background.

That combination of technical finance, leadership and commercial judgement is what separates a genuine Head of Finance from someone who simply has the title.

HEAD OF FINANCE OR FINANCIAL CONTROLLER?

One of the most important questions before beginning a recruitment campaign is whether the business actually needs a Head of Finance or a Financial Controller.

A Financial Controller is normally more focused on accounting, financial controls, month-end, year-end and audit.

A Head of Finance usually has wider responsibility, taking ownership of the whole finance function while also dealing with budgets, forecasting, cash and the wider leadership team.

There is significant overlap between the two positions.

The important point is that the scope of the role should determine the recruitment strategy, rather than the title.

If the main problem is inaccurate accounts, weak controls or a poorly managed month-end, a Financial Controller may be the right appointment.

If the business needs one qualified finance leader to run the whole function, manage the team, control cash, produce forecasts and advise the MD, a Head of Finance is likely to be more appropriate.

Accountancy Capital helps businesses make that distinction before starting the search.

WHEN IS IT REALLY A FINANCE DIRECTOR?

There is also a danger of going too far in the other direction.

A business may advertise for a Head of Finance but expect the person to manage investors, arrange funding, lead acquisitions, oversee a sale or take responsibility for finance strategy at board level.

Those are generally Finance Director responsibilities.

If the role requires a statutory director, regular investor or lender discussions at strategic level, or responsibility for a fundraise, acquisition or sale, it may be a Finance Director appointment rather than a Head of Finance.

Getting the level wrong can make recruitment much harder.

A Finance Director may ignore a Head of Finance advertisement because the title does not reflect the responsibility.

The salary can also be set at the wrong level.

Accountancy Capital's approach is therefore to establish the scope first and then benchmark the position against the correct market.

THE HEAD OF FINANCE AT DIFFERENT STAGES OF GROWTH

The same job title can describe a very different role depending on the size of the business.

For a business with turnover of around £5 million to £15 million, the Head of Finance may be the first senior finance hire and possibly the only qualified accountant in the organisation.

They may be replacing a combination of a bookkeeper, external accountant and an MD who has been heavily involved in the numbers.

This is usually a hands-on position.

The successful candidate may need to build a reliable month-end process, produce management accounts, take control of cash and introduce proper budgeting and forecasting.

They need to be comfortable doing the work themselves rather than simply managing a large team.

At around £15 million to £40 million turnover, the finance function is likely to have developed further.

There may be a Management Accountant and other finance staff beneath the Head of Finance.

The role becomes more about leading and reviewing, while forecasting, working capital, banking relationships and audit become increasingly important.

Above roughly £40 million turnover, the finance function may contain several specialists and potentially operate across multiple entities or locations.

At this point, systems, reporting structures and team management become increasingly important.

The ideal candidate will normally have experience of running a finance function of similar complexity.

WHAT MAKES A STRONG HEAD OF FINANCE?

ACA, ACCA and CIMA-qualified candidates are all well represented in the Head of Finance market.

However, the qualification is only the starting point.

What really matters is what the candidate has actually done.

Have they built or rebuilt a finance function?

Have they owned a year-end and managed the auditors?

Have they managed cash and the banking relationship?

Have they produced budgets and forecasts used by senior management?

Have they recruited and developed a finance team?

Have they implemented or upgraded accounting systems?

And have they worked directly with an MD or board and been prepared to challenge senior management when the financial evidence required it?

These questions are much more revealing than simply looking at a candidate's current job title.

COMMERCIAL JUDGEMENT

The Head of Finance is often expected to be commercially involved in the business rather than operating as a purely technical accountant.

Suppose revenue is increasing but cash is falling.

The Head of Finance should be able to investigate the reasons.

Perhaps customers are taking longer to pay. Perhaps stock has increased. Perhaps margins have deteriorated. Or perhaps the business is growing faster than its working capital can support.

The finance leader needs to identify the issue, explain it clearly and help management decide what to do.

The same applies to investment decisions, pricing, expansion, recruitment and other major commercial decisions.

A good Head of Finance does not simply tell the board what happened last month.

They help management understand what is likely to happen next.

INTERIM HEAD OF FINANCE RECRUITMENT

Not every Head of Finance requirement needs to be permanent.

An interim Head of Finance can be extremely useful when an existing finance leader leaves unexpectedly, when a business is undergoing a systems change, during an acquisition or when the company needs additional support through a difficult year-end.

An interim can stabilise the finance function while the business decides what the permanent structure should look like.

This can be particularly useful where management knows that the existing finance function needs to change but has not yet decided whether the permanent appointment should be a Financial Controller, Head of Finance or Finance Director.

An experienced interim can improve reporting, strengthen controls, establish a reliable forecast and help define the requirements for the permanent appointment.

Accountancy Capital recruits interim Heads of Finance across the UK.

FRACTIONAL HEAD OF FINANCE

For smaller businesses, a full-time Head of Finance may not yet be necessary.

A fractional Head of Finance can provide senior finance leadership one or two days a week.

This can work particularly well where the business already has a bookkeeper, Finance Manager or junior finance team but needs experienced oversight.

The fractional Head of Finance can take responsibility for forecasting, management reporting, cash management, budgeting and financial planning while also advising the Managing Director.

It provides the business with senior financial expertise without immediately committing to a full-time senior salary.

As the company grows, the fractional arrangement can potentially develop into a permanent appointment.

HEAD OF FINANCE RECRUITMENT FOR FCA-REGULATED FIRMS

Accountancy Capital also recruits Heads of Finance for FCA-regulated businesses.

These appointments can require a combination of commercial finance experience and regulatory knowledge.

Depending on the business, the Head of Finance may be involved in regulatory reporting, capital and liquidity monitoring and client money oversight, alongside the normal finance responsib