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What does a Financial Controller Do and How Can One Help Your Business?

Most people understand that financial controllers play important roles in businesses and organizations of all different types. However, the average person does not have a comprehensive understanding of what financial controllers do and why they are essential to a company’s success. If you own or manage a growing business and do not have a financial controller, you should seriously consider adding one. Here’s why.

What Does a Controller Do?

There comes a point in every business’s progression when its bare-bones financial department can greatly benefit from the oversight of an expert financial analyst. Perhaps the company’s financial reporting has slowed, maybe the figures are inaccurate, or perhaps the company needs a new source of funding. Maybe the business owner or manager is struggling to determine which metrics are the most meaningful and how those metrics should be tracked. These are all legitimate reasons to add a financial controller to a business.

Financial controllers are executives at the senior level who serve as the head of an organization’s accounting department. Controllers oversee the creation of financial reports ranging from income statements to profit-loss statements, balance sheets, and so on. Controllers also perform budgeting, internal control monitoring, and compliance audits. Part of what makes financial controllers so important is they analyze financials in-depth to provide the business owner and manager with the insight necessary to make important decisions. Controllers even contribute in the context of technology, helping to select the best accounting and finance-related tech tools.

Why Businesses Need a Financial Controller

If you are like most people, you have likely wondered, “What does a controller do?” Financial controllers are helpful in that they help prevent security breaches, accounting fraud, and potentially costly errors. The bottom line is bookkeepers and even those with an undergraduate accounting degree sometimes lack the skills and training necessary to create and execute effective internal protocols. Controllers also provide certified public accountants (CPAs) with guidance when tax season rolls around or when the business is audited. Bookkeepers likely do not have the knowledge, experience, education, or skills necessary to provide such essential support.

Above all, the financial controller takes ownership of the company’s accounting. The buck stops with the financial controller as he or she has the experience and knowledge necessary to understand the meaning of each financial component and make alterations as required. However, it is important to note this professional does not supervise the finance team including the bookkeeper, accountant, and support staff. Such supervision is performed by a CFO as opposed to a financial controller. The financial controller’s role is also distinguished from that of the CFO in that the CFO is sometimes involved in the overarching financing strategy and fundraising.

Financial Controllers and Company Size

There is a common misconception that only large corporations need financial controllers. However, there are plenty of situations in which it makes sense for small businesses to add a financial controller. As an example, small businesses often need more overarching guidance beyond an accountant or bookkeeper, especially if the company lacks a CFO. There is no shame in admitting you do not have the time, energy or knowledge necessary to monitor your company’s accounting. Furthermore, most business owners and managers cannot verify the accuracy of financial reports. The answer is to hire a financial controller who delves deep into financial reports to verify them and also pinpoint the root causes of figures that are inaccurate and brainstorm the right solutions.

A startup probably won’t need a financial controller right off the bat. Furthermore, a small business with only a couple of employees won’t need a financial controller either. However, growing businesses should seriously consider adding such a professional. In particular, when a business’s revenue hits half a million dollars, it makes sense to add a financial controller. If the business does not have a CFO, adding a financial controller won’t replace such a role yet it will certainly help the business expand with sound accounting processes and controls until a CFO can be brought on board in due time.

When It Makes Sense to add a Financial Controller

Accounting needs to change as businesses grow. An expanding and evolving business will have increasingly complex accounting challenges as time progresses. There will come a point in time when it is necessary to add a financial controller to ensure the company’s accounting is in full compliance with the law, ensure ledgers are properly managed, and provide additional specialized assistance.

If you own or manage a business that is growing or has grown to a point where management needs assistance with the financials, it is time to lean on a financial controller. This professional’s insight and skills will help determine the impact of important business decisions on the company’s finances, ensure all financial information is accurate and provide overarching management. So don’t spend your limited time and effort attempting to handle all of your company’s financial challenges on your own. You shouldn’t have to sweat the small stuff of compliance with tax regulations and inventory management when a financial controller can do this highly specialized work correctly down to the very last detail.

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