Akash Sharma CPA

When Do you Need a Company Controller for Your Business?

COMPANY CONTROLLER

As your business grows, you may realize that you cannot keep up with the financial workload. Once you realize it, you delegate financials to your bookkeepers and accountants. However, when your company starts to scale up, you may have to hire more staff to handle finances. It is where you may think of hiring a company controller.

Financial aspects are challenging and include planning and forecasting to make better decisions. So, you may have a question in your mind “When Should My Business Hire a Controller?”. No worries, we will help you out.

What Does a Company Controller Do?

Before moving to when your business requires financial controller services, you should understand the basic duties of corporate controllers. Since it is one of the key figures in your company’s accounting and finance division, it has many responsibilities. Business financial controllers are part of the higher-level management and assist the company in fulfilling its objectives. The controller role in a company may vary from business to business, but overall, you may find the company controller performing the following core duties.

  • Create financial policies and procedures.
  • Preparing tax strategies.
  • Create financial reports.
  • Prepare budgets and monitor them.
  • Manage the employees in the finance department.
  • Safeguard business assets.
  • Managing cash flow.
  • Ensuring the accuracy of all accounting procedures.
  • Administer risk management and insurance regulations.
  • Implement and oversee internal controls.
  • Provide information on employee benefits.
  • Act in a fiduciary capacity for business operations.
  • Accept responsibility for financial reports and paperwork.
  • Provide proactive market, trend, and best practice advice.
  • Facilitating the transfer of tax information to your CPA.
  • Choosing and managing accounting software.
  • Inform personnel of their obligations in the workplace.
  • Assisting management with financial decisions.
  • Training accounting department.
  • Communicate with HR for financial information.

Financial controllers are not just necessary for large firms but are also indispensable for small businesses. However, the controller duties in a small company depend on the scale of the financials.

  • Creating financial statements.
  • Account reconciliation.
  • Helping in tax compliance.
  • Managing AP and AR.
  • Guiding the accounting staff.
  • Closing the books
  • Preparing monthly cash flow and expenses.
  • Strategic advice to top management.

When Should My Business Hire a Controller?

There can be many various signs which implicate that your business requires a controller. However, it is up to the management to decide when to hire a company controller since it is a highly qualified job and demands skills, and charges a lot of money.  A few of the signs are:

When Should My Business Hire a Controller

Your Business Is Growing Rapidly

Every business likes to scale up at a faster rate. In the changing business scale, your accounting and bookkeeping may lag behind. So, to tie all the loose ends and organize your finance department, you will need a company controller. In the time of expansion, a controller will provide you with the correct data about financial health that will ultimately help you to invest wisely.

Your CFO Has a Lot on Plate

Sometimes, in a business, you may ask your chief financial officer to perform the duties of a controller. So, apart from doing strategic planning, forecasting, and decision-making, your CFO may end up working with bookkeepers and accountants. It may cause him to neglect the basic duties which he should perform.

So, when you get a controller for your company, it will assist your CFO in providing the essential financial data and also team up with your accountants and bookkeepers.

Accountant Needs Guidance

At an initial level, accountants can help you with managing all your financial records and provide you with necessary financial reports. They may be able to smooth down the accounting process, but when your business starts to grow, it can be challenging for them. An accountant does not have the experience of overseeing the whole firm’s finances. It is the job of the firm controller.

Late Reports and Poor Tax Compliance

If all your financial reports are behind schedule, then you are surely losing big for your business. Having a detailed report at the right time can help your business to make the right choices at the right time. If your accountant is not able to keep up with the requirements, you should get a controller for your business.

what does the controller do

On the other hand, if your accountants and bookkeepers are not able to file tax reports according to the federal, state, and local bodies, then you may seek a controller’s help. A controller will surely reduce the workload and help your business to reduce your tax liabilities.

To Avoid Fraudulent Activities

In the modern world, your business may be performing the best practice, but people around you may want to cheat you. Without sound and secure processes, your business can be vulnerable to fraud. A controller can help you to create a strong and robust flowchart of activities and procedures to avoid any errors and prevent you from any fraudulent activities.

How to Hire a Financial Controller?

If you have any of the above indicators, then it is high time for your business to hire a financial controller.

Businesses can search out LinkedIn and other platforms or take referrals from other staff to filter out potential candidates. But in the end, you will need to decide on the basis of the skills of a financial controller. You should hire a business controller that has minimum educational qualifications.

  • Master of Business Administration (MBA)
  • Bachelor’s degree in finance or a related discipline.

Specific certifications, such as:

  • Chartered Financial Analyst (CFA)
  • Certified Financial Planner (CFP)
  • Chartered Global Management Accountant (CGMA)
  • Certified Public Accountants (CPA)
  • Personal Financial Specialist (PFS)
  • Certified Management Accountant (CMA)

Some significant characteristics to look for while interviewing candidates for the position of company controller include:

  • The function of a financial controller is demanding and necessitates much relevant experience. It is critical that they have good accounting background as well as tactical knowledge in your sector.
  • They must have the ability to create, implement, and execute organizational processes. They should be able to design processes, methods, and systems based on best practices.
  • A candidate must have significant knowledge of GAAP.
  • One of the most important responsibilities of a controller is to give a proactive and meaningful understanding of the company’s finances and to apply that information to future analyses.
  • Controllers must be meticulous about details, deadlines, and the accuracy of their job, along with discipline and excellent organizational abilities.
  • A grasp of US Securities and Exchange Commission (SEC) laws is advantageous.

What is the Cost of Hiring a Financial Controller?

The cost of hiring a business financial controller depends on many factors:

  • Size of work
  • Location
  • Experience

However, an entry-level financial Controller with less than 1 year of experience can expect to make an average total salary of $58,800. It also includes bonuses and overtime pay. On the other hand, if you are hiring a financial controller with 1-4 years of experience, you may have to pay them between $70,000 to $80,000.

As the experience increase, the pay grade also increases. You may have to pay around $82,000 to 86,000 to a company controller with 5-9 years of experience. When you hire a controller with over a decade of experience, it will be very costly. The salary may vary from $ 90,000 to 100,000.

Frequently Asked Questions about Finance Controller

What are the required skills for a financial controller?

Necessary financial controller skills are –
1. Accounting knowledge.
2. Updated the regulations.
3. Good with maths.
4. Business acumen.
5. Good strategic and analytical skills.
6. Leadership qualities.

When does a corporation require the services of a controller?

When the size of your firm grows to the point that accounting records based on Generally Accepted Accounting Principles (“GAAP”) are required, you should consider hiring a Controller. Also, you may require the service of a controller when the number of transactions in your company increases. It could amount to $10 million or more in revenue.

What is the distinction between a treasurer and a financial controller?

The treasures are held responsible for money management, whereas the controller is more involved in financial statement reporting. If you want to cultivate a relationship with investment banks to increase the company’s funds, the treasurer is your go-to man. On the other hand, the controller negotiates the best loan interest rates on such funds.

What is the role of a controller in a small business?

A controller is in charge of an organization’s daily accounting activities, which include accounting, payroll, accounts payable, and receivable. The controller also helps in the company’s strategic financial decisions.

What is the difference between a controller and a bookkeeper?

The bookkeeper is mainly responsible for calculating and maintaining ledgers. They record financial transactions and also prepare government reimbursements. A controller administers and monitors an organization’s financial accounting and reporting. The controller oversees internal controls, analyses financial data for decision-making, and communicates with external bankers, accountants, and lawyers.

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I am Billie wilson, a financial analyst who loves to share knowledge. I believe that everyone deserves the opportunity to succeed and so I guide people in their journey to financial growth

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