Bad Traits of a Finance Director And How SMEs Can Avoid Them

Introduction - Bad Traits of a Finance Director

Hiring a Finance Director (FD) is one of the biggest decisions a construction or engineering SME can make. The right FD will protect cashflow, improve margins, and help directors make confident decisions. But the wrong FD can slow growth, mismanage risk, and create unnecessary costs.

Too often, businesses rush into hiring without knowing what to look out for, and end up paying the price.

At Jones Financial Accounts (JFA), we help SMEs avoid these pitfalls by providing part-time FD support tailored to construction and engineering firms. In this blog, we’ll highlight the bad traits of an FD, why they matter, and how to avoid them when making your next hire.

What You Need to Review

When considering an FD, the first thing to review is not their CV but their approach. Skills on paper mean little if their mindset doesn’t align with your business. Here’s what to watch for:

• Overly technical without commercial focus. An FD must translate numbers into business action. If they can’t explain finance in plain English, you’ll struggle to make decisions.

• Reactive, not proactive. A weak FD waits for problems. A strong one anticipates risks, like cashflow shortfalls or supplier disputes, before they happen.

• Poor cultural fit. In construction, an FD must work with project managers, suppliers, and site staff. If they can’t communicate outside the boardroom, they’ll isolate themselves.

• Lack of sector knowledge. An FD who doesn’t understand stage payments, retentions, or CIS rules, may cause costly errors.

Review these traits during interviews and trial projects. Look for evidence of both financial expertise and the ability to guide real-world decisions that impact day-to-day operations.

Why It Matters for Businesses

The difference between hiring the right FD and the wrong one is stark.

The FD becomes a trusted advisor. They highlight risks before they damage cashflow, guide directors on pricing strategy, and help win funding by presenting credible forecasts. For example, one SME we worked with improved supplier terms and secured a £250k overdraft facility because their FD provided reliable numbers lenders could trust.

A poor FD creates hidden risks. Imagine hiring someone who ignores retentions in cashflow forecasts. The business may appear profitable on paper but suddenly runs short when payments are withheld. Or consider an FD who never challenges project managers’ costs, profits vanish, but directors don’t realise until year-end.

In fast-moving industries like construction and engineering, poor FD oversight leads to lost contracts, supplier disputes, or worse, insolvency. That’s why reviewing traits upfront isn’t optional; it’s essential for survival and growth.

Strategy to Get It Right

Hiring well requires a clear strategy. Here’s how to avoid costly mistakes:

1. Define what you need. Don’t just ask for an “FD.” Decide whether you want someone focused on cashflow, project reporting, or growth strategy. Align the role with your goals.

   
   

2. Test commercial thinking. In interviews, ask scenario-based questions: “If a £1m project is delayed by three months, how would you manage cashflow?” Their answer reveals whether they think like a business partner or just a number-cruncher.

   
   

3. Check cultural fit. Introduce them to project managers or suppliers before hiring. Do they explain things clearly? Do they listen as well as advise?

   
   

4. Consider a part-time FD. If you’re not ready for a full-time hire, trial fractional FD support. This lets you benefit from expertise without the full-time salary commitment.

   
   

5. Set KPIs early. Agree on measurable outcomes, improved margin reporting, timely cash forecasts, or reduced late payments. This ensures accountability from day one.

   
   

With the right approach, you avoid bad hires and secure an FD who genuinely supports your growth.

Common Mistakes (with Consequences)

• Hiring too quickly. Rushing without proper checks often results in poor cultural fit, leading to friction between directors and site teams.

  
  

• Confusing an accountant with an FD. Year-end accountants file taxes; FDs advise strategy. Expecting one to do the other leads to unmet expectations.

  
  

• Ignoring industry knowledge. In construction, misunderstanding CIS or VAT reverse charge rules can result in HMRC fines and reputational damage.

  
  

• Over-relying on personality. Likeability matters, but substance is key. A “yes-person” FD may avoid tough conversations, leaving blind spots in the business.

  
  

Consequences range from penalties and supplier disputes to mispriced contracts and lost credibility with banks.

Misconceptions

• “Any FD will do.” Not true, sector knowledge and commercial experience are vital.

• “A full-time FD is always better.” Many SMEs benefit more from part-time or fractional support, scaling input as they grow.

• “The FD just handles the numbers.” The best FDs shape business strategy, influence operations, and protect profit, not just balance the books.

Why Professional Support Pays Off

At Jones Financial Accounts (JFA), we’ve seen the consequences of hiring the wrong FD and the benefits of getting it right. By working with us, you avoid costly mistakes because:

• We bring sector-specific knowledge in construction and engineering, from CIS compliance to project profitability.

  
  

• Our part-time FD model means you get top-level expertise without paying a full-time salary.

  
  

• We provide management packs, cashflow forecasts, and commercial analysis that give directors clarity and confidence.

  
  

• We act as a bridge between the boardroom and the site, ensuring finance supports operations, not hinders them.

  
  

In short, we help businesses grow stronger, avoid penalties, and improve margins, while freeing directors to focus on strategy, not spreadsheets.

Key Takeaways

• A bad FD can damage cashflow, margins, and credibility.

• Look out for traits like poor communication, lack of sector knowledge, and reactive behaviour.

• Use a clear hiring strategy: test commercial thinking, check cultural fit, and set KPIs.

• JFA provides fractional FD expertise tailored to construction and engineering SMEs, reducing risk and improving profitability.

Wrapping up today's insights, tomorrow we simplify another accounting challenge