Finance directors · the role
What does a finance director do?
The short answer · updated
A finance director (FD) runs a company’s finance function and is its senior voice on money. They own budgets, forecasts, cash and funding, make sure the accounts and tax filings are right, and advise the chief executive and board on decisions. Where the FD sits on the board, they carry a director’s legal duties.
What a finance director is responsible for
The finance director takes the numbers the accounting team produces and uses them to run the business. In most companies the job covers the list below. How much of it the FD does personally depends on the size of the team: in a small company the FD may also do the controller’s work; in a larger one a financial controller runs the accounting and the FD leads.
The FD is also the person the board relies on for compliance. Directors are responsible for the company’s annual accounts and filings, and the company must work out, pay and report its Corporation Tax. In practice the finance director makes sure both happen.
- Planning: the annual budget, rolling forecasts and the financial side of the business plan.
- Reporting: monthly results to the chief executive and board, with a clear view of what is on or off track and why.
- Cash and funding: cash flow, banking relationships, debt facilities and, with the chief executive, raising equity.
- Controls and risk: the financial controls, insurance, and the risks the board should know about.
- Compliance: statutory accounts, audit, Corporation Tax and VAT, usually delivered through the financial controller.
- Leading the team: hiring and developing the finance team, and choosing the systems it runs on.
- Decisions: pricing, investment cases, acquisitions and cost, where the FD gives the finance view before the business commits.
Who a finance director reports to
In most small and mid-sized companies the finance director reports to the chief executive or managing director, and is often a member of the board. In a larger company or a group there may be a CFO above, and the FD runs finance for a division, a subsidiary or a country and reports to the CFO.
An FD on the board reports to the board as a whole, not only to the chief executive. That matters when the FD has bad news to deliver: the board is entitled to hear it directly.
Below the FD there is usually a financial controller, and in larger teams heads of financial planning and analysis, tax and treasury. Our page on what a financial controller does sets out that role.
Qualifications and legal duties
Most finance directors are qualified accountants, through the ICAEW’s ACA, the ACCA Qualification or CIMA’s CGMA Professional Qualification. CIMA’s strategic level covers financial strategy and risk management, which is close to the FD’s day-to-day work. Many FDs come up through a financial controller role, from audit practice or from financial planning and analysis.
Many finance directors are also statutory directors, registered at Companies House. Every director owes the company the general duties in sections 171 to 177 of the Companies Act 2006, including to exercise reasonable care, skill and diligence. Companies House guidance says the more qualified or experienced a director is, the greater the standard expected, and gives a qualified accountant as the example. An FD who is a chartered accountant is judged as one.
Some finance directors are called "finance director" without being appointed to the board. The title does not make someone a statutory director, but the guidance also says the duties apply to anyone who acts as a director without being formally appointed. In a large company the FD may also be the Senior Accounting Officer: the director or officer with overall responsibility for the company’s financial accounting arrangements, a role HMRC says cannot be filled by an outside adviser.
In a listed company the FRC’s UK Corporate Governance Code asks the board to declare how effective its material internal controls are. The finance director does much of the work behind that declaration.
Financial controller vs finance director vs CFO
A financial controller owns the accounting: records, the month-end close, controls and filings. The work looks back at what has happened.
A finance director runs the whole finance function and looks forward: budgets, forecasts, cash, funding and the finance view on decisions. The FD usually manages the controller.
A CFO leads financial strategy at executive-committee or board level: capital structure, investors, acquisitions and the long-range plan. In a smaller business the FD covers most of this and the title is a matter of choice; in a larger one the CFO sits above one or more FDs. To hire at that level, see our CFO headhunter page.
Fractional, interim and part-time finance directors vs permanent
A permanent finance director suits a business that needs a senior finance owner every day.
A fractional finance director gives a business senior finance judgement for a set number of days a week or month: board packs, forecasts, a funding round, a bank relationship. It suits growing companies that need an FD’s thinking but not five days of it. See fractional finance director roles, or the shorter fractional FD guide.
An interim finance director works full-time for a fixed period: covering a vacancy, a sale, a turnaround or a system change. See interim finance director roles. A part-time finance director is usually employed on reduced hours; see part-time finance director jobs.
Where a fractional or interim FD works through their own limited company, the off-payroll working rules (IR35) may apply. Status turns on how the engagement runs in practice, and a medium or large client makes the determination. Our IR35 guide sets out the tests.
What a finance director earns
Pay depends on the size and complexity of the business, whether the FD sits on the board, the sector, location and whether the business is owned by investors. Permanent FDs are paid a salary, often with a bonus; fractional and interim FDs a day rate.
Our finance director salary page sets out permanent and fractional pay, each figure with its source.
How to hire a finance director
Scope the seat first: what the FD will own, who they report to and whether they join the board. If the gap is a reliable close and controls rather than leadership, a financial controller may be the better hire.
Then choose the route (permanent, fractional, interim or part-time), confirm the qualification with the awarding body, and test candidates on your own management accounts and forecast.
We recruit permanent, interim, fractional, part-time and temporary finance leaders. To hire a finance director, see our finance director recruitment page; every brief gets a shortlist of 3–5, each with pay or day rate, availability and IR35 position set out.
Questions people ask
Is a finance director the same as a CFO?
In a small or mid-sized company the roles often overlap and the title is a matter of choice. In a larger company or group the CFO leads financial strategy at executive-committee level and the FD runs finance for a division or subsidiary, often reporting to the CFO.
Is a finance director a board member?
Often, but not always. Some FDs are appointed statutory directors and carry the duties in the Companies Act 2006; others hold the title without a board seat. Companies House guidance says the duties apply to anyone who acts as a director, appointed or not.
What is the difference between a finance director and a financial controller?
A financial controller owns the accounting: records, close, controls and filings. A finance director runs the whole finance function and looks forward: budgets, forecasts, cash and funding. The FD usually manages the controller. See what a financial controller does.
Does a finance director need to be a chartered accountant?
Not by law, but most are qualified through the ACA, ACCA or CIMA. A qualified accountant who is a director is held to a higher standard of care and skill (Companies House).
What does a fractional finance director do?
The same job for a set number of days a week or month: forecasts, board reporting, cash, funding and the finance view on decisions. It suits businesses that need an FD’s judgement but not full-time. See fractional finance director roles.
How much does it cost to hire a finance director?
A permanent FD is paid a salary; a fractional or interim FD a day rate. Our finance director salary page sets out pay with sources. On every shortlist we set out each candidate’s pay or day rate.
How do I hire a finance director?
Scope the seat, choose permanent, fractional, interim or part-time, confirm the qualification and test candidates on your own numbers. Our finance director recruitment page sets out the process; we send a shortlist of 3–5, each with pay or day rate, availability and IR35 position set out.
