The differing demands on the finance function - SMEs vs PLCs

According to ACCA, 45% of members have worked for an SME at some point in their career. And whilst they are often much smaller in comparison to PLCs, the finance function is, without doubt, a crucial aspect of running such a company.

After all, an effective finance function can attract investment and increase the likelihood (and speed) of sustainable growth.

Of course such needs in a small or medium sized company are driven in part by regulation and compliance, but, it shouldn’t be discounted that rather like larger PLCs these needs are also driven by the overall vision of the business (and indeed its stakeholders). So whilst a finance team working within a large PLC might be relied up on to provide professional insight and guide investment (as well as cost control) so might the equivalent within an SME, only on a much smaller scale.

A major difference between the finance functions with PLCs and SMEs is that of process. That’s not to say that SMEs don’t have stringent and tight processes in place, but it’s much more likely - especially in the case of newer businesses - that processes are born from a ‘learning’ experience (inevitable as a business develops and grows) and will be more subject to change as the desired growth occurs.

PLCs, on the other hand, will have such tight processes in place (and tried & tested, I might add) that making even the smallest of changes will result in a degree of upheaval for those affected – which is to say that the finance function within an SME has the luxury of plasticity (whilst remaining compliant, of course).

Also, the financial capabilities of a PLC are down to success whereas within an SME the reverse is true: having a well thought out business planning process and effective management reporting (the cornerstones of an effective finance function) creates success. Another key difference is that in almost all instances, SMEs seek their finance function externally, whereas PLCs will mainly employ in-house teams to manage this.

Some SMEs are perhaps guilty of not using their finance function to best effect – lagging behind in terms of technological changes in particular. Conversely, PLCs will embrace new forms of technology much more readily – although perhaps the drawback here is that the same consideration simply isn’t given when investing in this area as would be by a growing SME hoping to nurture and protect consistent growth.

Regardless of whether you provide a finance service in a large, multi-site organisation, or a small startup or boutique organisation, you will inevitably face career challenges that may lead you to question whether you are better suited to another in-house role. Whatever the catalyst, it is worth considering what it is that you would like to achieve once you move on (and potentially up) before you take the plunge.

Speaking to a trusted mentor, a specialist recruitment advisor or an expert in your field who has experienced a plethora of roles in a myriad of companies may well prove useful at this time.

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