As your company grows, the number and complexity of transactions may also begin to increase. This is typically when most companies need a financial controller. While bookkeepers generally handle the day-to-day processing of transactions, financial controllers are typically brought into growing, more complex companies, to oversee the bookkeepers and to provide financial reporting and other key performance indicators (KPIs) of how the business is performing. 

Some of the key information financial controllers will provide to business owners include:

  • The financial condition (health) of your business
  • Sources and uses of cash
  • The timing and amount of cash to be received
  • The timing and amount of cash to be paid
  • The profitability of the business
  • An analysis of other costs, including but not limited to, direct costs and general and administrative expenses (G&A).

 What is the Financial Controller?

In smaller and mid-sized companies, the financial controller is often the most senior accountant and financial advisor.  It is often very common in smaller companies for the controller to perform some of the functions normally performed by a chief financial officer (CFO) in larger companies. In addition to supervising the bookkeeper, one of the most important functions of the financial controller is to prepare financial reports for management.  Once these reports are prepared, a best practice is for the controller to have a meeting with management to provide an analysis of the reports and the implications for their business to help them make more informed decisions. 

Responsibilities

  • Preparation of financial statements, including:
    • Balance sheets
    • Income statements (profit and loss statements)
    • Statements of cash flows
    • General and administrative expenses
    • Regulatory reports
    • Management reports
  • Cash collections
  • Vendor payments
  • Bank reconciliations
  • Maintain the fixed asset sub-ledger and record depreciation
  • Maintain the prepaid insurance schedule and record the related amortization
  • General ledger account analysis
  • Reconciliations of sub-ledgers to the general ledger
  • Preparation of certain tax returns (Payroll taxes, Sales taxes)
  • Coordinating and working with outside accountants
  • Developing and implementing internal controls and related procedures
  • Compliance with regulations 

 

Benefits of Hiring a Financial Controller

In today’s workplace, most companies work in automated environments that facilitate or enable working remotely. As such, there is a greater demand for professionals that can work remotely or virtually.

virtual financial controller provides the same services and benefits you would expect from a controller working on-site.  The virtual controller would obtain access to the company’s systems, applications, and files remotely and would perform the same tasks and deliver the same reports as to when working on-site. 

The key to success is maintaining regular communication with management so expectations are understood and met. Ultimately, there is no difference in the benefits that a company will realize from the financial controller, whether the work is performed virtually (remotely) or on-site.

By entering an independent contractor arrangement, employers reduce payroll taxes, insurance premiums, and other costs associated with having a full-time employee on the payroll. The need for a financial controller can be cyclical in a small business so this arrangement can allow the business to ramp up the controller’s workload during busy times and ease off during slower times. 

Further, it is very common these days for staff to turn over frequently, often within 1-3 years, which is disruptive to an organization.  Engaging an outside firm like CFO Strategies to handle your financial controller function can protect your company against staff turnover and the disruption and cost of starting over with a new controller. 

This structure can allow the virtual controller to serve multiple companies anywhere in the country, giving them more knowledge of various systems and practices.  That knowledge will be brought to bear at your company. Outsourcing your controller function can provide a level of expertise that can otherwise be hard to get. 

Independent controllers for hire and companies that provide virtual controllers often have extensive experience in many different industries. Finding someone locally who can provide that level of experience while staying within the client’s payroll budget may be a challenge.

Businesses don’t need to provide office space, a laptop, or other supplies to the virtual controller. Virtual controllers can often flex their schedules so long as certain critical tasks are completed by the assigned deadline.

Things to Consider Before Hiring A Financial Controller

Before hiring a virtual or in-person financial controller, you’ll want to carefully define the role and your expectations. This ensures that you’re not overpaying for services you don’t want or need and sets the new hire to be successful. 

In some cases, an outside hire will take over certain job duties from your current staff. In these situations, it can be worthwhile to ask staff members to complete at least a brief job description for their current position. This will allow you to mix and match various duties based on what you’d prefer your controller to handle. After you’ve made your hire, you can then amend your other employees’ job descriptions to reflect their reduced workload and assign other tasks as needed.

Some of the questions you may want to ask a candidate for the controller position include:

  • How do you manage time and how do you ensure that all deadlines are met? 
  • What financial reports have you prepared and how frequently?
  • What measures have you taken to control costs in other companies you worked for?
  • What is your experience with companies of our size and/or in our industry?
  • What control and procedural improvements have you made in your past jobs?
  • Do you prefer to work independently or with a team?
  • Do you have experience mentoring junior finance staff?
  • What factors do you consider when hiring finance staff? Are you willing to participate in our organization’s hiring process?
  • What software have you used? Describe your proficiency with spreadsheet software.

These questions can give you a better idea of whether the financial controller’s experience and work style will mesh well with your organization.

CFO Strategies provides companies with accounting and financial reporting services financial services, including all functions performed by the CFO, controller, and bookkeeping, both on-site and virtually. Our services are generally designed for companies that need these services on a part-time basis, but we can also undertake full outsourcing engagements as well.

Our cost-effective options are customized to fit each business’s needs, including the ability for full on-site services, full virtual services, or a blend of both.  We have many years of experience providing financial controller services for a range of industries, including but not limited to,  construction, architectural and engineering firms, transportation, and nonprofits.

To learn more about the benefits and impact we have made for our clients, read our client testimonials. 

Contact us today to set up your consultation or learn more about the services we offer.