What Does a Controller Do?
Almost like a doctor, they understand and protect your organization’s financial health. A controller takes a broad view of your business’s accounting processes. They develop and implement policies and procedures for your bookkeeping/accounting staff to follow to ensure that financial data are recorded accurately and in a timely fashion.
So while your bookkeeper processes your day-to-day accounting data, the controller uses that data to create financial statements. Controllers also use the numbers to create other meaningful reports such as budgets and cash flow projections to support the company’s goals and vision.
When Do You Need a Controller?
There are several situations that would benefit with the help of a controller.
- Your accounting department is growing, and your bookkeeper cannot do it all. A controller can oversee staff. They can create accounting job descriptions and duties, so nothing falls through the cracks.
- You are not sure if bills are paid on time, if you are invoicing customers accurately, or if you are collecting your receivables consistently. A controller creates and maintains internal accounting controls and would ensure procedures are followed.
- You want to expand or diversify your business and you want to know if your company has the cash to support the new ideas. A controller would maintain a current cash flow projection so you can see your business from that perspective or scenario.
- You are not sure how the company is spending its money. You would like to verify if spending is in alignment with your values. A controller would maintain an up-to-date budget and manage company spending.
- Your management team needs accurate and timely financials to make informed decisions. A controller would have month-end closing procedures in place so that financials can be delivered on time.
- You want to automate some of the accounting processes. A controller can research new accounting technologies and get help with implementation and training for more recent and efficient software.
- You need someone to act as a liaison with your CPA for tax preparation.
- You want to compare your business performance with industry standards. A controller would set some KPIs (Key Performance Indicators) and review those numbers with industry standards or internal goals.
- Your business expanded quickly, and you are not sure how to handle the volume. A controller would have policies and procedures in place that would adjust easily to the growing business.
- You’re just not sure how your business is doing. A controller would interpret the numbers and how they relate to your mission, vision, and goals. They can use various financial reports to assist you in achieving greater efficiencies, maximizing revenues, and managing costs.
How Will You Benefit from a Controller?
Although they will be your source for financial information, a great controller can see beyond the numbers. Of course, you want your business to grow! But if you find your business is growing too quickly, an experienced controller can step in to track and proactively chart ways to fund this expansion. This helps avoid those uncomfortable “growing pains.” Controllers understand your business and create a solid financial foundation to help increase revenues, enhance cash flow, and reduce costs. Having a controller on your team to manage staff and day-to-day financial operations can give you peace of mind, so you’ll sleep better at night. They keep the accounting organized and timely so that management can make important financial decisions to support the company’s vision and mission.
Controller’s Duties (Although they may vary depending on the size of your business):
- Prepares financials
- Creates and maintains budgets
- Creates cash flow and forecasting reports
- Maintains inventory accounting
- Manages accounting team
- Monitors month-end closing
- Works directly with your CPA
- Develops bank relationships
- Creates and maintain internal accounting controls and procedures
- Supports decision-making and planning activities
You may have someone doing the duties of a controller right now, but they’re split. They (the bookkeeper or the accountant, and maybe you, too) are wearing two or three hats. Your company may be at the point where you need to hire a controller based on what you now know they can do for your business.
On the other hand, you may choose to outsource your controller duties (either for the short-term or on a permanent basis) instead of adding a permanent employee to the payroll. This person takes the organization’s pulse, collects other financial health data, and works with the management team to make the correct ‘diagnosis’ so your company can thrive.