Small to medium-sized businesses can do well with an accounting manager and bookkeeper as the financial team. The issue comes along when these businesses continue to grow. Larger companies should seriously consider expanding their team and hire a company controller.

Having a company controller as well as an accounting manager and bookkeeper helps businesses keep better track of their finances and financial trends.

What is a company controller and does your business really need one? Continue reading to find out.

What is a Company Controller?

A company controller is like the head of the accounting department. They oversee and manage every function related to accounting. Larger businesses especially benefit from a controller because of the number of roles in an accounting team.

The team often consists of a cost accountant, general accountant, accounts payable function, accounts receivable function, reporting function, bookkeeper, accounting manager, and financial controls function. The controller will work alongside a chief financial officer or CFO if the business has one.

In smaller businesses, a controller will usually be in charge of making the final financial decisions for the company. It’s also common for the controller to have more than one position. Not only do they have to manage the rest of the accounting team, but they may be responsible for the accounts payable and accounts receivable functions.

Some aspects controllers focus on are reporting, analysis, project management, financial accounting, and budgets. If a CFO or other higher-ups such as a Financial Director is present, a controller will likely have a specialized role in the company. They won’t be responsible for making all the financial decisions.

A controller sometimes has the role of doing research on creditworthiness aside from managing the team.

By providing management and support throughout the accounting department, the team works more efficiently. Reports, analysis, and every other function will continue to be accurate with a good company controller.

When You Need a Company Controller

Many business owners choose to handle the role of managing finances rather than hiring a company controller. This cuts the business’s expenses and keeps the owner in control of the finances. A hands-on approach helps the owner stay instantly updated with how money is flowing in and out of the company.

As the business grows, though, the owner will have to eventually hire a company controller. This can happen for a few reasons.

It will become too much for a business owner to focus on expanding their company and on managing and interpreting the company’s finances. Larger companies need that extra person to help out.

Another reason you should hire a controller is if you want to know the financial state of your business quickly, and you want accurate information. Having a position dedicated to this role is helpful for you, the business overall, and the accounting team.

Maybe you’re not sure if growing your company is the best financial decision. A controller will tell you how a major purchase is likely to affect your business.

Controllers also monitor taxes, licenses, and permits. They make sure you meet all of the requirements and will notify you if a license or permit expires. This applies to the local, state, and federal levels.

Should a Controller be External or Outsourced?

Hiring an external controller means they weren’t originally part of the company. You don’t only have to choose people who have a lot of experience in the field or role.

There are less-experienced people with talent. Train them for 60 to 90 days to see if they are right for the position.

You could also consider an outsourced controller. They won’t be in-house, which is one of the biggest downsides, but you’ll have a wider range of options. They’ll work remotely so they can live anywhere.

Simply send them their work and communicate via Skype or another online chat application when you need to. It shouldn’t be a problem that they’re not in-house if you have a CFO and Financial Director.

Does your business have a senior accountant who has worked there for years? If they know the company well enough and you have a succession plan, you could promote them to a controller.

The median income for controllers in 2015 was $75,698 a year. This number can move well into six figures. Hiring a part-time, freelance, or less seasoned controller will save you money.

Large Companies Need Controllers

Rapidly expanding companies can’t neglect to fill the controller role forever. They’ll need another addition to their management team to keep the business running smoothly.

Although a CFO and controller can have the same duties for smaller companies, they’re different in larger companies. Don’t wait for things to get out hand.

Now that you know what is a company controller, use this guide to know if it’s time to hire one.

Don’t hesitate to contact us for a consultation.