The Hidden Costs of Not Having a Finance Director

Introduction - Not Having a Finance Director

Every successful construction or engineering business eventually hits a turning point, when numbers alone no longer tell the full story. You’ve grown beyond basic bookkeeping, projects are getting larger, and decisions are being made faster. But without the right financial guidance, small missteps can quickly become expensive lessons.

A Finance Director (FD) brings the commercial experience, strategic oversight, and financial control that most SMEs simply don’t have in-house. From managing cash flow and forecasting margins to preventing overtrading and tax penalties, an FD ensures your growth doesn’t outpace your control.

At Jones Financial Accounts (JFA), we act as outsourced FDs for construction and engineering firms across the UK. This blog explains what a finance director actually does, the mistakes they help you avoid, and how having one could protect thousands of pounds, and years of progress, in your business.

What You Need to Review

If your business turnover has grown beyond £500k, your financial setup needs more than compliance. You should review how decisions are being made, how often you’re reviewing financial reports, and whether anyone in your team is interpreting what the numbers really mean.

Start by asking:

• Do we have accurate management accounts every month, not just at year-end?

• Is our cash flow forecast realistic, covering project timelines, retentions, and supplier payments?

• Are we tracking project profitability or just total company profit?

• Who’s responsible for financial risk and do they have the experience to see early warning signs?

  
  

A Finance Director reviews your entire financial ecosystem, from systems and reporting to margins, overheads, and investment decisions. They don’t just crunch data; they challenge assumptions and ask, “Is this decision sustainable?”

Without this level of review, it’s easy to make confident decisions with incomplete information and that’s how good businesses lose control.

Why It Matters

In construction and engineering, the line between success and disaster can be paper-thin. A project can look profitable on paper but drain your cash in reality. Without FD-level insight, that risk goes unnoticed until it’s too late.

Done right:

A lift installation company used monthly cash flow forecasting guided by their FD. They spotted upcoming supplier costs before project payments cleared, adjusted the schedule, and avoided a £90,000 shortfall.

Done wrong:

A contractor relied solely on their year-end accountant. By the time they realised two major clients hadn’t paid, their VAT and PAYE were overdue, and penalties mounted. They ended up borrowing at 12% interest just to keep trading.

Getting it right means more than staying solvent, it means staying strategic. A Finance Director helps you move from reactive firefighting to proactive control.

They turn hindsight into foresight, helping you anticipate challenges before they become crises.

Strategy to Get It Right

To gain FD-level control, businesses should focus on three key pillars: visibility, structure, and accountability.

1. Visibility: Introduce monthly management accounts that show project-level profit and loss, not just total turnover. Review cash flow every week, not every quarter.

   
   

2. Structure: Build a finance rhythm, a monthly board-style meeting where financial reports are discussed alongside operational updates. This keeps everyone aligned with reality.

   
   

3. Accountability: Empower your finance team (or outsource one) to flag risks early. A good FD doesn’t sugarcoat; they forecast, advise, and act.

   
   

Even if you can’t yet afford a full-time FD, outsourcing gives you access to that expertise for a fraction of the cost.

At JFA, our clients often save more in reduced waste, tax efficiency, and better pricing decisions than our service costs. A solid strategy isn’t about doing more, it’s about doing what matters, on time, with clarity.

Common Mistakes

Many businesses wait until they’re in trouble before involving financial leadership. Common mistakes include:

• Overtrading: Taking on more projects than your cash flow can support. This often leads to short-term borrowing, delayed wages, and supplier strain.

  
  

• Ignoring early warning signs: Missed budgets, repeated cash flow gaps, and delayed reconciliations all point to poor control. Left unchecked, these can cause insolvency.

  
  

• Underpricing projects: Without understanding true costs (including prelims and overhead recovery), many firms underquote, killing margins before work even begins.

• Neglecting compliance: Late VAT, CIS, or PAYE filings can attract fines and lose credibility with HMRC and clients.

  
  

• No management reporting: Decisions are made from instinct instead of evidence, leading to costly misjudgements.

These aren’t “rookie” mistakes, they’re structural weaknesses. A Finance Director builds the controls and insight needed to prevent them before they become expensive.

Misconceptions

“We’re not big enough for a Finance Director.”Reality: SMEs need FD-level support the most, large firms already have systems and teams.

“My accountant already covers that.”Reality: Year-end accountants report on history. Finance Directors guide the future, forecasting, strategy, and decision-making.

“We can’t afford one.”Reality: A fractional FD service (like JFA’s) costs a fraction of a salary but delivers 10x the insight.

Why Professional Support Pays Off

A Finance Director doesn’t just save money, they save direction. At Jones Financial Accounts (JFA), we act as your outsourced finance department, bringing CFO-level oversight to businesses that have outgrown their bookkeeper.

We apply The JFA Growth Finance Framework™ to deliver structure and insight across five stages:

1. Foundations: Cleaning up books, VAT, payroll, and CIS.

2. Visibility: Creating management accounts and forecasts that drive clarity.

3. Control: Implementing dashboards and KPIs that track performance.

4. Strategy: Turning data into decisions that strengthen margins and cash flow.

5. Partnership: Acting as your finance lead, supporting board decisions and growth plans.

   
   

With JFA, you gain not just compliance, but control, direction, and confidence. We help construction and engineering firms make smarter decisions, reduce waste, and protect profit, so growth never becomes a gamble.

8. Key Takeaways

• A Finance Director gives you foresight, not just hindsight.

• The biggest risks aren’t visible in the accounts, they’re hidden in poor planning.

• Outsourced FD support brings control without the full-time cost.

• JFA helps you turn complex numbers into clear, profitable decisions.

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