The best time to hire a financial Controller depends on the business’s size, current staffing, projected future growth, and organization of the firm’s accounting function.

What Is a Controller?

A Controller is an employee in a management position responsible for some or all of a business’s financial, accounting, and human resource functions. They also keep track of the company’s books.

4 Signs You Need to Hire a Controller

When to hire a Controller is up to the discretion of management or the business owner based on the business’s financial position. Controllers have many functions that can help companies to grow and stay on track.

When You Need More Than an Accountant

A Certified Public Accountant (CPA) will compile, review or audit financial statements independent of the company. They also compile tax returns.  On the other hand, a firm’s management, typically the Controller, will oversee the initial preparation of financial statements within the company. When working with small businesses, they usually perform functions beyond the scope of the business’s accounting department, if the business has one.

When Your Business Is Growing

The exact functions of a Controller vary based on the size of the business. The larger the business, the more responsibilities the Controller has.  As a business grows, different layers of management will need timely financial information to help manage the business’s functions.  It is the Controller’s responsibility to communicate to management what types of information the Controller needs to establish accounting reports tailored to meet the managers’ needs.

Controllers Go Beyond Accounting

The primary function of a Controller is the organization of the accounting function. At its most basic level, this involves ensuring the accounting cycle’s design, operation, and management.  Controllers perform the following:
  1. Identify financial transactions (including supporting documents such as receipts and invoices)
  2. Record financial transactions in the original books of record, also known as journals
  3. Post summary information from the journals to the general ledger
  4. Prepare a summary of financial accounts – known as a trial balance – using totals in the general ledger
  5. Create a worksheet to begin analyzing the transactions for accuracy
  6. Prepare financial statements for internal or external use
  7. Close the books for the period (usually monthly) and restart the process 
A Controller is not customarily required solely for a business’s bookkeeping. Controllers or bookkeepers usually prepare the statements for internal and external use. (Financial statements can take different forms depending on who will use them.) 

Controllers Handle Financial Functions

Financial functions of the company involving a Controller include:
  • Planning and budgeting, including comparing budgets with actual results
  • Forecasting future cash needs relating to operations
  • Forecasting future asset acquisitions and financing required
  • Strategic planning
  • Technology planning
  • Financial analysis
  • Coordination with outside auditors and/or tax preparers
Depending on the company’s size, the Controller may perform these duties themselves or under the supervision of a Chief Financial Officer (CFO). Most small businesses don’t have a CFO, so these duties fall to the company’s owner or the Controller. A key question business owners must ask themselves when determining whether to hire a Controller is, “Are these duties necessary to the future growth and success of the business?”  A Controller can help ease some of the burdens of these tasks for the owner or management.

Controllers Help With Human Resources

Depending on the size and structure of a firm, managing human resources may also fall to the Controller. Most small businesses don’t have a separate department or employee designated for human resources. 

When You Need More Detailed Reports

The types of reports can include but aren’t limited to cost reports, inventory reports, budget versus actual numbers, and so on. These reports are meant “for company eyes only” or internal users. Depending on the business’s size, the Controller may involve themselves in other accounting functions such as:
  • Performing or managing accounts payable and receivables duties
  • Performing or managing payroll duties
  • Implementing a set of internal controls to protect the assets of the firm
  • Inventory management
  • Keeping track of fixed assets and their depreciation
  • Sales tax
  • Payroll and/or income tax preparation, if not contracted to an outside service.

When It Makes Sense Financially

A full-time Controller can expect close to or above a six-figure income, not including benefits and payroll taxes. The more duties expected of the Controller, the more a firm will have to pay. Chief Financial Officers are even more expensive.

Cost-Effective Controllers

Many businesses can benefit from the services of a Controller but find the cost prohibitive. Fortunately, outsourced firms – typically CPAs – can provide many of the duties of a Controller at a fraction of the cost of hiring one full-time. The typical outside Controller will perform the following duties, tailored to the company’s particular needs, for a flat monthly fee:
  • Set up or evaluate the books and accounting procedures of the company
  • Make recommendations regarding and implementing improvements to the accounting system
  • Provide a tailored list of bookkeeping functions ranging from a day to day transactions to monthly financial reporting
  • Identification and design of management reports
  • Budgeting and variance analysis
  • Cash flow management
  • Strategic planning
  • Asset acquisition planning
  • Inventory management
  • Financial analysis
  • Technology planning
  • Income tax planning and preparation (legally minimizing taxes)
  • Representation before state and federal tax agencies
  • Coordination with outside auditors

Final Considerations When to Hire a Financial Controller

You should consider hiring a Controller to increase profitability and improve financial management once your business can best use their services. Financial Controllers can provide a wealth of services and invaluable expertise in various areas. Take the time to evaluate CPA firms that provide Controller services and assess the cost and benefits of hiring a full-time employee. You may find that a CPA firm can bridge the gap.