Once an owner accepts that the business needs senior finance input, the next question is how much of it the business actually needs. Hiring a permanent finance director feels like the natural step, while using a virtual FD for a few days a month may look like a temporary compromise.
In reality, the two models solve different problems. Hire too early and the business may pay a senior salary for work that does not fill the week; rely on limited external support for too long and important decisions, controls and team leadership may not receive enough attention.
What Each Role Actually Involves
A virtual finance director is an experienced, qualified finance professional who
provides senior financial leadership for an agreed amount of time each month. The work commonly includes forecasting, funding, pricing, board reporting and testing major decisions before the business commits to them. Depending on the engagement, the virtual FD may also strengthen reporting, controls and the wider finance function, while routine bookkeeping and transaction processing remain with the existing team or accountant.
A full time finance director does the same strategic work, but also owns the finance function day to day. That usually means leading and developing the finance team, running the month end close, designing financial controls and systems, managing banking relationships and being on hand for every operational question that has a financial angle. The role is broader, and so is the commitment on both sides.
Virtual FD vs Full Time FD at a Glance
Virtual FD | Full time FD | What to ask yourself | |
Time commitment | Agreed days each month, flexed as needed | Full time, permanent | How many days of senior work are there? |
Main focus | Strategy, forecasting, funding and big decisions | Strategy plus running the finance function | Do we need strategy, leadership, or both? |
Team leadership | Oversight of your bookkeeper or accountant | Manages and develops the finance team daily | Is there a team that needs managing? |
How you pay | Fee for the time and scope agreed | Salary, employer NI, pension, bonus and recruitment costs | Is the need steady or does it peak? |
Getting started | Can usually begin without a recruitment process | Search, interviews and notice period | How soon do we need help? |
Breadth of experience | Sees many businesses and situations | Deep knowledge of one business | Do we need range or depth right now? |
What a Full Time Finance Director Really Costs
Published salary benchmarks vary considerably by location, sector, business size and the seniority of the appointment. Glassdoor reports an average UK finance director salary of approximately £121,000[3]. Using that figure as an illustration, employer National Insurance at 15% on earnings above £5,000 would add roughly £17,400 under HMRC’s 2026 to 2027 rates. The minimum employer pension contribution of 3% of qualifying earnings would add approximately £1,300.
That takes the direct cost to around £140,000 a year before any bonus, car allowance, benefits or recruitment fees, and senior packages often include more generous pension terms than the legal minimum. The question is not whether that’s expensive. It’s whether your business has enough senior finance work to justify it every week of the year.
A virtual FD is not automatically the cheaper option for every business. Fees vary according to the time required, the complexity of the work and whether the engagement includes projects such as fundraising, acquisitions or systems improvement. The useful comparison is therefore not salary against monthly fee in isolation, but the total annual cost of obtaining the level of senior input the business genuinely needs.
Six Questions That Decide Which You Need
1. How much senior finance work is there each week?
Be honest about the volume. If the strategic work amounts to a monthly review, a forecast update and a handful of big decisions each quarter, a full time director will spend much of the week on tasks a more junior person could do. If board level decisions, lender conversations and complex reporting genuinely fill the week, a virtual arrangement will struggle to keep pace.
2. Do you have a finance team that needs daily leadership?
A team of several finance staff needs someone to manage workloads, review work, develop people and own the month end. That’s one of the strongest arguments for a full time FD. If your finance function is a bookkeeper and an external accountant, a virtual FD can provide the oversight without a permanent senior manager.
3. How complex is the business?
Multiple companies in a group, several currencies, regulated activities, large contracts with complicated revenue recognition or a heavy investment programme all
increase the need for senior financial oversight.
They do not automatically require a full time FD: the deciding question is whether those issues create a continuous weekly workload, demand daily decisions or require an internal finance team to be led. A single trading company with straightforward income is less likely to reach that threshold.
4. Are you preparing for a specific event?
Raising finance, buying a business, preparing for sale or restructuring all create an intense but temporary need for senior input. A virtual FD can step up their time for the project and step back afterwards, without a permanent appointment made for a short term need.
5. How quickly do you need help?
Recruiting a permanent finance director takes time, from writing the brief and running the search to interviews and the successful candidate working their notice. A virtual FD can usually start without that process, which matters if a lender, investor or deadline isn’t going to wait.
6. Is your need steady or does it peak?
Many businesses need more finance input around year end, budgeting, funding rounds or seasonal peaks, and less in between. A salary is fixed. A virtual arrangement can be sized to the work, and adjusted as the business changes.
Worked Example: When the Answer Changes
Consider a growing manufacturing business with a bookkeeper, an external accountant and a bank facility up for renewal. The owner is weighing up a permanent FD. In reality, the senior work is a monthly review of the management accounts, a rolling forecast, the bank renewal and advice on a planned equipment investment. A virtual FD working a few days a month covers all of it, and the bank sees a credible forecast at renewal.
Two years later, the same business has acquired a second company, built a finance team of four and taken on investor reporting. Now the finance work genuinely fills the week, and the team needs daily leadership. That’s the point to recruit a full time finance director, ideally with the virtual FD helping to write the role, assess candidates and hand over properly. Neither decision was wrong. Each fitted the business at the time.
It Doesn’t Have to Be Either Or
Many businesses use a virtual FD as the first step, then move to a permanent appointment when the work justifies it. Others keep a virtual FD alongside a strong in house financial controller, who runs the day to day function while the FD provides strategic oversight. The model should follow the needs of the business, not the other way round.
A virtual arrangement also depends on access, responsiveness and clear authority. It is unlikely to work well if information is routinely late, the FD is excluded from important decisions or the engagement allows too little time to understand the business properly. Before appointing a virtual FD, agree what they will own, how often they will be available, who will implement their recommendations and how success will be measured.
When a Full Time FD Is the Right Call
If your business has a sizeable finance team, several entities, investors who expect weekly involvement, or financial risks that need someone present every day, a full time finance director is likely to be the better fit.
If those demands are important but periodic, a virtual FD may still provide the senior input you need without creating a permanent role before the workload justifies it. A virtual FD can also cover the gap during recruitment and help define the role, assess candidates and manage the handover.
How ATS Works as Your Virtual Finance Director
ATS Accountants is based in Rochdale, with a presence in Chadderton and Rainford (St Helens). Our virtual FD work is led by director Shahed Alam FCPFA, who has more than 17 years’ post-qualification experience, including external audit work at a Big 4 firm. Where ATS also prepares the management accounts, statutory accounts and tax work, the virtual FD can work from the same underlying financial records. That continuity helps connect strategic advice with the figures used for reporting, forecasting and tax planning.
If you’re still deciding whether you need FD support at all, our guide to the signs your business needs strategic finance support is a good place to start. You can find how the service works in detail on our virtual finance director service page. As a Xero Silver Partner, we work directly in your cloud accounts.
Not sure which model fits your business? Book a free consultation or call us on 0161 818 4949, and we’ll give you an honest view, even if the answer is a full time hire.
Frequently Asked Questions
They can be, but it depends on the individual, so it’s worth checking. Look for a professional accountancy qualification from a recognised body, such as ICAEW, ACCA, CIMA or CIPFA, and senior experience relevant to your business. At ATS, our virtual FD work is led by Shahed Alam FCPFA.
Yes, a virtual FD can attend board meetings, present the figures and advise the directors. Formally appointing them as a statutory director is a separate decision, because it brings legal duties under company law. Many virtual FDs advise the board without being appointed to it.
Usually when senior finance work genuinely fills the week. Common triggers include a finance team that needs daily leadership, frequent investor or lender involvement, complex transactions and financial risks that require continuous oversight. A group structure may add complexity, but the decisive question is whether it creates enough ongoing work and day-to-day responsibility to justify a permanent appointment. If those demands remain important but periodic, a virtual FD may still be the better fit.
Yes, and it’s one of the most useful things they can do. A virtual FD knows what your business needs from the role, so they can help write the job description, assess candidates’ technical ability and hand over the finance function properly once the new director starts.
It can be either, and often it’s a mix. Much of the analysis and forecasting can be done remotely through cloud accounting software, while board meetings and key discussions with lenders or investors often work better in person. Agree the balance at the start.
Not necessarily. Commitment comes from a clear scope, regular contact and accountability for results, all of which can be agreed in a virtual arrangement. Qualified accountants are also bound by their professional body’s ethical code, including confidentiality.
