Should small businesses add a financial controller to the team?
The daily activities of a controller vary based on company needs. Hiring for this position as a small business may appear daunting; however, adding a controller to your team can allow for better oversight of daily cash flow tasks and alleviate some of the company's existing responsibilities.
What does a job description for a financial controller include?
A controller is the chief accounting officer and plays an integral role in leading a company's accounting department. They supervise accounting activities such as drafting financial statements, updating the general ledger, completing payroll, processing accounts payable/receivable, budgeting expenses, staying updated on tax laws, analyzing financial data, and other accounting-related activities. In addition to heading this department, controllers also coordinate with management in various departments to address how companies can save money.
How is a Chief Financial Officer different from a controller?
Other than being in charge of all activities in the accounting department, the controller oversees employees. Professionals within the accounting department, including accounting manageress, cost accounting managers, credit analysts, and payroll managers, seek guidance from the controller. The controller answers specifically to the Chief Financial Officer (CFO), who analyzes records, forecasts finances, implements budgets, and looks at the bigger picture regarding financial status.
What a controller can do for your small business:
Enact bookkeeping policies:
Many small businesses do not create formal accounting procedures upon launching. This is an acceptable practice for the short term; however, you need a concrete accounting policy to work toward expansion and growth.
Manage financial reports:
Financial analysis is an essential assessment of a company's overall health. Generating financial reports is a time-consuming task that is difficult to produce regularly. Likewise, a key predictor of your company's overall health may be inaccurate if you are not formally trained to create these reports.
A controller will allow you to divert your attention toward other activities and ease your mind knowing they created accurate financial reports. A controller will also make you aware of any bookkeeping issues before they escalate.
Human resources activities:
Most small businesses do not have a human resources department, meaning the owner is likely handling HR responsibilities independently. Controllers can:
- Answer questions concerning employee benefits.
- Handle 401(k) activities.
- Organize employee files.
- Assist with onboarding and training new hires.
Controllers can advise owners on the best time to perform internal audits ranging from small, department-specific audits to extensive audits concerning the entire company. Besides advising when to conduct an audit, controllers can facilitate actions and tasks associated with this process.
Utilize new software:
Accounting processes should be updated and efficient; however, selecting what software to use, the features your company needs, a training program for employees, and other new software implementation can be stressful. A controller is well equipped to handle these responsibilities as they have deep knowledge of cloud-based accounting solutions that will work best for your company.
Should I hire a bookkeeper, controller, or CFO?
The above information describes how a controller can save a small business valuable time and money; however, depending on the size of your business and the industry you operate within, you may need a part-time bookkeeper or require a complete financial staff to include a controller and CFO.
Hiring a bookkeeper:
Bookkeepers generally record financial actions that have already occurred in the company and have minimal influence on business strategy, if any at all. Their primary job includes recording business financial transactions and compiling reports based on their information.
Some bookkeeping tasks include:
- Recording: sales, accounts payable, accounts receivable, expenditures, etc.
- Monitoring variable costs
- Managing payroll, areas involving tax, insurance deductions
- Storing paperwork and forms
- Creating reports for management, the government, stockholders, shareholders, and employees
- Ensuring bills are paid on time
- Managing insurance and health plans
- Preparing taxes
Small businesses experiencing time-consuming accounting actions that have begun to compromise time management or efficiency should consider hiring a bookkeeper. This first step can be helpful, primarily if you rely on software to understand accounting, are unfamiliar with tax codes, have experienced company growth, must prepare professional reports for investors, etc.
Hiring a controller:
Here is a quick description of when to hire a controller:
Hiring a bookkeeper is an excellent initial step, but if a company expands or experiences rapid growth, it will likely need to onboard a controller. As a business grows, a controller becomes integral to tactical management and staff supervision. Hiring this professional is a sound choice that protects a company and its assets.
Some indications that hiring a controller may be suitable for your company:
- You need to regularly provide financial reports to banks, creditors, or shareholders.
- Your company needs to design financial policies/procedures.
- Internal controls must be implemented to protect company assets.
- You desire to prepare and monitor budgets.
- You desire advice on markets and trends.
- Being proactive on tax strategies is necessary for your company.
- New software implementation.
- You must monitor receivables, pursue collections, and grant credit to customers to improve cash flows.
- Increased importance in monitoring spending and payment of invoices.
Hiring a CFO:
CFOs take part in all business decisions and advocate for the best financial needs of a company. CFOs are capable of:
- Guiding a company through mergers, acquisitions, the IPO process, and business structure changes
- Expanding into new markets
- Streamlining operations
- Allocating corporate asset investment
- Forecasting trends within the market
As your business grows, you may determine that a financial staff supervised by a CEO is needed to manage the business's finances.
How to find the right financial controller for your company:
Below is an outline of 10 questions to ask/topics to discuss with a candidate seeking a financial controller position in your company. These prompts will allow you to understand a candidate's expertise, ability to interpret financial data, leadership skills, and attention to detail.
- What factors do you take into account when developing a financial strategy?
- What reports have you created in the past?
- What reporting software platforms are you familiar with?
- How have you helped junior-level staff grow their careers?
- How have you increased revenues for previous companies you have worked for?
- Describe how you have improved the efficiency of reporting financial information and the quality of financial reports.
- How do you translate complex financial information to team members outside the financial department?
- What is the most challenging financial project you have worked on? What strategies did you use to complete it?
- How do you introduce new technology to others on your team?
- Give an example of an accounting or financial reporting control you have implemented.
Financial controller salary and education:
The average base salary (meaning financial compensation before benefits, bonuses, raises, or other areas of compensation) of a financial controller, specifically in the Denver, Colorado area, was reported as $95,071 in 2022.
To become a financial controller, you need to understand accounting principles, create accurate financial reports, and have top-notch organizational skills to oversee your department. That being said, there are different entry methods into this promising career. Possible qualifications include a BS/BA in finance, accounting, or economics, an MBA, CPA, or ten or more years of professional experience in a related field.
Financial controllers should have a high degree of organization, attention to detail, and the ability to manage deadlines. An ideal candidate has advanced communication skills, an understanding of various software platforms, and the tendency to take the initiative.
Controllers need more than education
To become a controller, education, certificates, and experience are all necessities; however, several qualities have proven beneficial to succeed in this position.
Controllers lead a company's financial team in many ways; therefore, they must have strong leadership skills. Being proficient in this area will allow for ease in facilitating tasks and goals of the company and motivating and developing others on the team. It is crucial to lead others and manage projects in this position simultaneously.
Financial controllers must have reactive and proactive problem-solving skills to ensure they can take on whatever is thrown their way. A key focus of this position is to improve reporting and the general financial health of a company. For this reason, controllers must be able to plan and adapt their plans as needed.
Controllers must be able to digest complicated financial information and interpret it for employees outside the financial department. Those in this position help must make others aware of important financial information in an easily understandable language. Controllers should also seek to build strong relationships with CFOs and other department leaders, best facilitated through solid communication.
A strong work ethic and extreme professional drive focused on the company's success are integral to this position. A controller should be intrinsically motivated to innovate and make changes focused on financial success.
Looking deeper into this position, Career Explorer surveyed 842 controllers to find commonalities among personality traits specifically pertaining to controllers. Results show that:
- Controllers tend to be predominantly enterprising individuals, meaning they are natural leaders who thrive on influencing and persuading those around them. This also means they are highly skilled problem solvers and enjoy sales/management roles.
- They tend to be conventional, meaning they are heavily detail-focused, organized, and thrive in structured environments. Those in this category enjoy following rules and prefer working in a structured setting.
- Controllers highly value social responsibility, meaning they desire fair outcomes and have a general concern for the welfare of others. Controllers tend to value equality and are not particularly experience-seeking
These commonalities are not exclusive to controllers. One does not need to check each box to thrive in the industry; however, it is interesting to observe similarities among those who hold this position.
Controller trends and statistics for 2022
- According to a 2019 S&P Global Market Intelligence Report, companies that appointed females to top financial positions saw a 6% increase in profitability and an 8% increase in stock returns in the first two years since the promotion. This statistic indicates that during 2022, better opportunities for women aspiring for financial controller positions and other major financial roles may be available.
- The importance placed upon Environmental Social Governance (ESG) (how companies demonstrate their commitment to sustainability and ethical business practices) is only increasing. For controllers, this indicates that developing systems to track and codify a company's ESG efforts and communicate them to the public will be of utmost importance.
- Companies are increasingly reliant upon data and analytics. Controllers will have to continually adapt to new technological resources that provide in-depth analysis of a company's finances and have the ability to translate this data into actionable steps that shareholders and management understand.
- A trend toward remote work. The pandemic showed employers the possibility and benefits of working remotely. Upwork estimates that by 2025, 22% of Americans will work from home at least a couple of days per week. This statistic shows that the future will need new collaborative measures to maintain workflow and that controllers and other financial personnel will need to assess productivity and potential savings by using remote workers.
If you spend spare time on financial matters that could be better performed by an experienced professional, consider adding a financial controller to your team. This will allow you to better focus your efforts on other company areas, rest assured that a qualified professional is overseeing your company's finances. A financial controller could become an indispensable asset to your team. If you need help finding a great in-house controller, J2T can help. We place excellent financial personnel across Colorado and Montana. Don't hesitate to contact us today with your questions about placing a controller for your small business.
Written by Lauren Kemp
Lauren Kemp, Communications and Marketing Specialist at J2T, earned a Bachelor of Science in Business Management with a minor in Latin American studies and a Master of Science in Innovation and Management from Montana State University. Lauren hails from Montana and enjoys reading about the history of her home state. Her bucket-list items include touring the Biltmore Estate in Asheville, North Carolina, and taking an immersion trip to Chile to experience Latin American culture first-hand.
J2T is a recruiting and staffing firm that solely focuses on accounting and finance roles. J2T Flex facilitates all operational accounting needs including and all contract or contract to hire needs. On the direct hire side, J2T Recruiting specializes in Sr. Accountants/Analysts through CFO and touches everything in the corporate accounting and finance organizational chart. J2T is a women-owned business exclusively serving the Colorado and Montana markets with the overarching goal to serve you in all areas of the hiring experience.