Why should your firm create its own finance function?

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Case study

Many businesses, in particular smaller firms, will opt to

outsource many of their finance functions to third parties.

Often they might have little choice, as they simply don’t have

the resources available, but for those that do it’s certainly

worth investing in this area and creating their own

finance team.

According to the Association of Chartered Certified

Accountants, small and medium-sized enterprises can achieve

faster and more sustainable growth for a longer period of

time if they have their own well-developed finance teams

in-house, while it also helps them attract investment so they

can develop further.

But recruitment can sometimes be an inefficient process and

a matter of trial and error, as there is simply no guarantee of

actually finding the best person who fits a role. And of course

some appointments might not work out and they end up

leaving a firm in a short time.

This can be potentially disastrous if a firm is trying to put a

finance team together, so what can it do in order to bring

more certainty into the whole process and be sure they are

genuinely taking on top candidates who can do a great job?

How can a firm be sure they are

genuinely taking on top candidates

who can do a great job?

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Urban Decay, a cosmetics firm that was founded nearly

two decades ago, is perhaps a good example to look at.

In 2012, it was snapped up by one of the leading names in

the industry - L’Oreal - and it now sells its innovative range of

products through department stores across the UK, Europe,

the Middle East, Asia and Africa.

David Rutherford was in charge of the operation of Urban

Decay in the UK before taking on a similar role in Europe and

was tasked with the responsibility of setting up a head office

in Britain in preparation for a sale.

This meant he had to achieve a number of specific objectives,

each of which depended on him having access to a group of

finance professionals with plenty of expertise under

their belts.

Running the risk of having the wrong people taking on

these tasks was not an option, as Mr Rutherford was keen

to - in his words - “hit the ground running”, which meant

he needed a guaranteed source of quality and experienced

financial professionals.

He therefore turned to financial recruitment specialist

Goodman Masson in order to maximise his chances of

finding the very best people to fill the roles. The agency

partnered with Mr Rutherford to create a complete finance

function for Urban Decay, consisting of six individuals.

“I had been impressed with Goodman Masson’s blend of

depth of understanding of the sector, their network of

candidates at all levels and that vital personal touch, taking

the time to understand your business, its culture and the

importance of identifying candidates who will fit in, as well as

being able to do the job,” he commented.

“Therefore I gave Goodman Masson exclusivity on the

provision of candidates.”

This decision as certainly paid off for Mr Rutherford, who has

enthused about his “truly dedicated” team. He noted that as

well as fulfilling their own roles, each individual also works

hard to support each other, which he said is very important in

a small multi-tasking team.

Turn to specialist recruiters

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Sales at the company have doubled over

the last two years to 20 million.

The tasks at hand

Urban Decay’s new finance function helped Mr Rutherford

make progress on each of the important goals he was aiming

to achieve.

Firstly, he had to establish a UK operating subsidiary to take

back operational control of the brand from a third party

agency, and secondly he had to set up an office and recruit a

head office team.

Mr Rutherford also had to make sure the operational and

logistical infrastructure was in place to support the company’s

sales function, including IT systems, order processing,

importation, warehousing and delivery.

The next task at hand was to set up an HR and payroll

function to support a sales force of 200, as well as work with

the sales managers to both devise and deliver a retail strategy

for the UK.

Also on the agenda was establishing a strategy for Europe

and roll it out, while establishing the base in the UK as Urban

Decay’s main European hub.

Amongst all this were key tasks such as financial reporting,

dealing with VAT and taxation, budgeting and managing the

inventory and cash flow.

Turning to Goodman Masson to find people capable of

completing these tasks efficiently and effectively soon paid

off. For instance, a UK operation that now imports products

from the US and distributes and sells them through 100

outlets across the UK and Ireland is now in place, with a

250-strong workforce.

Mr Rutherford and his team have also been able to take back

control of the brand in Britain and therefore provide potential

purchasers with invaluable reassurances.

The finance team also established all the processes,

procedures and controls required to run the venture and

successfully complete the sale of Urban Decay UK to L’Oreal.

During this period, they have helped to bring about and

manage strong organic growth, with further expansion being

brought out as a result of extended distribution.

In fact, sales at the company have doubled over the last two

years to £20 million, with earnings before interest, taxes,

depreciation, and amortisation improving by £3.5 million

during this period.

But none of this could have been achieved without having

a dedicated and experienced team of financial professionals

at the helm, capable of using their expertise, skills and

knowledge to pursue a specific strategic objective.

It is a demonstration of how having an in-house financial

function is often the best approach, both in terms of the

practicalities of getting certain jobs done and in helping a

company achieve its wider business strategy.

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Conclusion

I had been impressed with Goodman Masson’s blend of depth of understanding

of the sector, their network of candidates at all levels and that vital personal

touch, taking the time to understand your business, its culture and the importance

of identifying candidates who will fit in, as well as being able to do the job

- David Rutherford, Urban Decay

Many accounting tasks can be outsourced to a third party

organisation, but with Urban Decay working to achieve such

specific and important goals, a hands-on approach and an

internal finance function was demanded from the outset.

Turning to Goodman Masson to create this finance function

within the company brought more certainty and peace of

mind into the whole process – and the results clearly speak

for themselves.

If you are looking to enhance your finance team please

contact Andrew at Goodman Masson for a confidential

discussion.

Andrew Webster-Garvey

Divisional Director

awg@goodmanmasson.com

0207 324 0533