Many UK business owners ask what finance directors do, and whether the role justifies a full-time salary. A finance director (FD) leads a company’s financial strategy. They oversee reporting, cash flow, budgeting and forecasting, manage tax and regulatory compliance, and advise the board on commercial decisions. For UK business owners, the real question is whether to employ an FD full time or bring in an outsourced one on a part-time basis.
This guide compares the two models, their costs and the signs that it may be time to switch.
What Does a Finance Director Do?
If you have ever asked yourself what a finance director does day to day, the answer sits somewhere between strategist and safeguard. Typical director of finance job responsibilities include:
- Financial reporting: Producing accurate management accounts and overseeing statutory accounts for filing at Companies House.
- Cash flow management: Forecasting inflows and outflows so the business can meet its obligations and plan for growth.
- Budgeting and forecasting: Setting targets, modelling scenarios and tracking performance against plan.
- Tax and compliance: Ensuring timely, accurate dealings with HMRC, including VAT, PAYE, National Insurance contributions (NIC), CIS where relevant, and readiness for Making Tax Digital (MTD).
- Funding and risk: Supporting bank relationships, investor reporting and internal controls.
- Board advice: Translating numbers into decisions on pricing, hiring, investment and expansion.
In-House and Outsourced Finance Directors: Comparison of Responsibilities
The core duties are the same under both models. What changes is how the role is delivered.
An in-house FD is a full-time employee embedded in your business. They are available daily, build deep institutional knowledge and often manage a finance team directly.
An outsourced FD is an experienced professional engaged on a part-time or fractional basis, usually for a set number of days each month. They bring senior-level judgement and cross-sector experience without a full-time commitment. They typically work alongside your existing bookkeeper or finance team, and you can scale their involvement up or down as your needs change.
In practice, many smaller businesses do not need a CFO or a Finance Head five days a week. They need strategic input at the right moments, such as budget setting, board meetings, funding rounds and year-end planning.
How Do the Costs of Both Finance Director Models Compare?
Costs are often the deciding factor, so it helps to look beyond the headline figure.
In-house Finance Director: Salaries for UK finance directors vary widely by sector, location and company size, but a full-time hire often runs well into six figures once you add employer NIC, pension contributions, benefits, recruitment fees and training. These are ongoing, fixed commitments whether or not the workload justifies them.
Outsourced Finance Director: You typically pay a monthly retainer or a day rate based on the time and scope you need. There are no employment on-costs, no recruitment fees and no cover to arrange during holidays or sickness. The cost is generally lower and more predictable, and it can flex as your business changes.
Price alone does not tell the whole story. The right comparison is the value delivered against the total cost of the role.
Which Finance Director Model Suits Your Business Stage?
Start-ups and early growth: An outsourced FD usually offers the best balance. You gain senior financial guidance, investor-ready reporting and sound forecasting without a heavy fixed cost.
Established SMEs: If your turnover is growing and decisions are becoming more complex, a part-time or fractional FD can bring structure to budgeting, cash flow and compliance before you commit to a full-time hire.
Larger or complex organisations: Multi-entity groups, heavy regulatory demands or large finance teams may justify an in-house FD who is present every day. Some businesses keep an outsourced FD for specific projects, such as an acquisition or a systems overhaul.
What Signs Show That Your Business Should Make the Switch?
Consider moving to an outsourced FD if you recognise any of the following:
- Your in-house FD costs more than the strategic value they currently deliver.
- You rely on a bookkeeper or accountant for decisions that need senior financial judgement.
- Cash flow is unpredictable, and forecasting is reactive rather than planned.
- Your FD has left, and you need continuity without a lengthy recruitment process.
- HMRC deadlines, MTD requirements or VAT filings are creating pressure.
- You are preparing for funding, a sale or a significant change in the business.
How Can You Move from an In-House to an Outsourced Finance Director?
A well-managed transition protects continuity. A sensible approach is:
- Define the scope: List the responsibilities you need covered, from reporting to compliance and board support.
- Document current processes: Capture systems, reporting calendars and key contacts.
- Agree a handover period: If your FD is leaving, overlap with the incoming provider where possible.
- Set clear reporting rhythms: Agree monthly review meetings, KPIs and deadlines.
- Review after three to six months: Check that the arrangement is delivering what you need, and adjust the days or scope.
Befree supports businesses through this process with experienced finance professionals. You can find out more about our services for CFOs and finance heads.
Conclusion
Understanding what finance directors do is the first step towards choosing the right model for your business. In-house FDs offer constant presence, while outsourced FDs offer senior expertise, flexibility and cost control. The best choice depends on your size, complexity and ambitions.
If you would like to discuss which approach suits your organisation, please visit our contact us page and speak to our team.
FAQs
What do finance directors do in a small business?
Is an outsourced finance director cheaper than an in-house one?
What is the difference between a finance director and a financial controller?
A financial controller manages the accounting function, including bookkeeping, month-end and statutory reporting. A finance director focuses on strategy, forecasting, funding and board-level advice.