This article covers the major responsibilities of a CFO in any small and medium-size business worldwide and specifically in the UK, as well as an overview of tools that can be used by CFOs to help them in their daily tasks.
It costs £12 and around 24 hours to incorporate a limited liability company (LLC) in the UK, but it generally takes considerably longer hours and greater costs to maintain compliance with corporate laws and to undertake the required UK Companies House filings.
During the whole life of the company, the company’s Directors, one of which often holds the CFO position, are responsible for 6 main aspects of the business:
1. Keep Company Registers up to date
Including, the Register of Secretaries, Register of Directors, Register of Members, Register of Applications and Allotments, Register of Persons with Significant Control (PSC)
2. Submit Filings and Changes to Authorities
In the UK the CFO would submit to Companies House the Annual Confirmation Statement (CS01), inform them through submission of different forms about new appointments of Directors and Secretaries, changes to the company name, address, accounting reference date; changes to PSC; changes to share structure, new issuances of securities; details of any new mortgages it has or mortgages it has paid off.
3. Keep financial and accounting records
In the UK it is required to keep financial and accounting records for at least 6 years. It is most probable that all CFOs and Accountants would utilise an accounting software solution for this purpose.
4. Pass Board Resolutions on important corporate events
As part of good corporate governance, it is necessary to pass a Board of Directors Resolution in every case when there is the issuance of new shares, decided to undertake a securities offering or dividend payments, change in the company name, removal of a director, changes to the articles of association.
5. Financial budgeting and forecasting
The most common responsibilities of modern CFOs would include the management of the company’s financial reporting, including cash flow and balance, modelling of the financial forecast.
6. Capital raising and investor relations
Usually, with the core involvement of the CEO, the CFO is engaged in a search for investors, negotiating with investors. He/She leads the company through the investment due diligence process, closing the deal with investors which involves the participation of lawyers whilst maintaining investor and then shareholder relations.
More precisely on a task level, the job of a typical CFO is represented by the graphic below: strategic decision-making at the top, supported by a broad base of transactional and reporting tasks.
Source: Anderssen Horovitz Blog
Traditionally all of these responsibilities were executed by the CFOs in spreadsheets, but as a company grows, management needs to make a decision to move important processes from static spreadsheets to dynamic and more secure digital software as the business scales, similar to the migration of client workflow onto a CRM. Spreadsheets are by their nature static, and as such, there is little that can be done with those records, while digital solutions provide more functionality to interact with the company stakeholders.
Currently, on the market, there are a number of software solutions emerging to help CFOs of startups and small-medium enterprises with their responsibilities.
#1 Accounting Tracking
Xero is one of the best-known cloud accounting tools on the market.
Xero helps understand and manage your cash flow, provides an overview of what bills are due for payment and which of your invoices are outstanding or paid. Schedule payments, batch pay suppliers and pay multiple bills in one simple transaction.
The biggest benefit accrues from Xero’s huge range of integration options, including everything from payment processing and travel tools to expense management.
Xero pricing starts at £10 per month.
#2 Financial Planning and Analysis
Float is online cash management and (daily and monthly) forecasting tool that helps you manage your business and keep on top of your cash flow and budgeting strategies. Integrated with Jira, Teamwork, Asana, Trello, Google/Outlook, Slack, Zapier.
Float pricing starts at £4 per month, per user. There is a free version
#3 Payroll Management
BrightPay is a great cloud payroll solution built specifically for the U.K. market. Users can be confident that their payroll processes are HMRC-compliant, and the auto-enrolment feature lets businesses establish employee pensions with no hassle. Most of the accounting software such as Xero, Quickboosk, Sage would have a cloud-based payroll solution, but BrightPay is offering a solid desktop version.
BrightPay pricing starts at £199 as a one-time payment. There is a free version
#4 Payments Processing
If your customers pay online via credit card, Stripe is just about the industry standard. It lets you easily issue invoices and accept credit payments through your app or website, without too much technical development.
Pricing is transaction-based -1.4% + 20p for European cards; 2.9% + 20p for non-European cards
#5 Virtual Data Room
iDeals is a traditional sophisticated virtual data room for due diligence. It offers data security tools, auditing, and search functionality for documents. The company provides secure document management services to the investment, legal, and life sciences sectors.
iDeals pricing is not disclosed, it offers different plans based on storage capacity and support level.
#6 Investment Workflow and Cap Table Management
Quoroom is designed to manage investor pipeline, communicate with investors, close investment rounds with the provision of all necessary legal documentation, manage complex cap tables, maintain a compliant shareholder register, issue securities and digital share certificates, store, share and sign unlimited documents, manage vesting and exercise share options, convertibles, debt securities and interest payments, execute share transfers, do the UK Companies House filings (SH01, CS01, AR01). Quoroom Investment Dealflow and Cap Table Management solution is unified for all jurisdictions, but filings are usually covered by the local platforms, such as Carta, Captable.io or Shareworks in the US.
Quoroom pricing starts at £9 per month.
Never too late to get work done in a smart way
It’s hard to imagine a CFO or even the whole finance team doing all of these functions without a software solution, the same as it’s hard to imagine the sales team undertaking a robust sales strategy without a CRM system.
Get the tools to free up your team to focus on strategy, risk management, growth solutions and creative thinking for your business. Many software solutions offer a freemium version for you to digitize your business processes from the early stage and be prepared for growth.
Photo credit to CFOshare
