What Does a Financial Controller Do?
10 November, 2021
Wayne Richard

Wayne Richard

5 minutes

If you’ve reached the point in your business that you require a more hands-on approach to financial management, it might be time to hire a financial controller.

A great financial controller combines the best of both finance strategy and asset management while ensuring your books are accurate and mitigating potential risks. 

In this post, learn more about what a financial controller does, what they handle within the business, and how they differ from an in-house or virtual CFO. 

What does a financial controller do?

Much like how every organization requires a business leader to spearhead company initiatives, each also demands a financial leader to organize company capital. Among high-performing companies, a financial controller becomes this financial leader to oversee an organization’s accounting and record-keeping efforts. They act as the business’s lead accountant. 

Also referred to as a “comptroller,” a financial controller handles the daily management and execution of various bookkeeping, accounting, and finance functions, including improving cash flow and facilitating profitable growth. As an organization scales and begins to surpass revenue goals, a controller is necessary to manage historical financial records and continue to steer the company in a positive direction. 

What are their roles and responsibilities?

The primary role of a financial controller is to direct all accounting activities and manage accurate books that reflect the money moving both in and out of the business. However, as the company’s lead accountant, a financial controller has a secondary set of responsibilities. Unlike accountants who strictly record an organization’s finances, a controller ensures data is timely, accurate, and in accordance with the rules established by the company.

In the case that there’s a discrepancy in company books, it’s a controller who should identify it, locate the source of the issue, and communicate the solution to the parties involved. In some organizations, a controller is also responsible for project management. They dictate where money is being spent to accurately track company expenditure. 

Additional daily roles and responsibilities of a controller include: 

  • Establishing budgets
  • Sales tax reporting
  • Federal income tax reporting
  • Liaise with tax accountants
  • Overseeing company insurance
  • Managing company information technologies
  • Generating new internal control policies and spending controls
  • Managing payments from customers and debtors
  • Advising on markets, trends, and best practices
  • Tracking revenue across the organization
  • Regulating corporate funds and accounts
  • Opening bank accounts
  • Administering payroll 

The responsibilities of a controller may vary depending on the size and annual revenue of their organization.

What’s the difference between a financial controller and a CFO?

It’s not uncommon for smaller organizations to hire one individual to act as both a Controller and a Chief Financial Officer (CFO). On the surface, both have similar roles that focus on the financial well-being of an organization. However, from daily responsibilities to overall positioning in the company, these roles are quite different. 

A financial controller is an accounting expert responsible for financial reporting, information management, and record-keeping. They likely come from an accounting background and focus on overseeing financial operations. 

An in-house CFO or virtual CFO is a financial expert responsible for future projections of cash flow as well as financial strategies and estimates. They likely come from a finance and banking background and focus on positioning the company with investors. 

Within an organization, both the controller and CFO manage budgets, track company spending, and generate financial reports. However, where a controller is responsible for overseeing daily finance-related functions, a CFO is responsible for strategic thinking, key decisions regarding the allocation of capital towards efforts to create the largest returns for the business owner or shareholders, and directs the future of financial functions. 

A controller typically reports directly to the CFO, where the CFO reports to the company CEO. 

When to hire your first controller

If you’re reading this article, chances are that you’ve realized it’s impossible to handle both the business and financial leadership of your business. You might be wondering if it’s time to hire a financially-savvy individual to spearhead company logistics for you. However, whether or not you require a controller depends on the circumstances of your organization. 

Generally speaking, there are a few indicators that your business is ready for a controller:

  1. Experiencing rapid growth 
  2. Finding consistent or unexplainable financial errors
  3. Expanding your business to new locations (especially globally)
  4. Raising funds from institutional investors or venture capitalists (VCs)

Another way to judge if your business is ready to hire its first controller is to consider your revenue. On average, organizations bringing in between $25 and $50 million in annual revenue require an in-house controller. Once this revenue level has been reached, your records must be based on Generally Accepted Accounting Principles (GAAP). 

How to hire a financial controller

Hiring a controller is very similar to hiring a VCFO. Here are some key steps to consider. 

1. Define the role 

Generally speaking, a financial controller will oversee all accounting and finance functions. However, as you can see by the above list of responsibilities, the actual role of a controller can shift depending on the needs of the organization. 

To find the ideal hire, take a look at exactly which roles your company needs to be fulfilled. Will the controller be locating discrepancies in reports or facilitating profitable growth? Will they generate new control policies or just implement them? Clearly define the role before hiring. 

2. Determine if the role is internal or external 

Next, decide if you want to hire internally or outsource? A Fractional controller is an individual or external accounting firm like Bean Ninjas that can fulfill the same role as an in-house controller, but without the costs associated with full-time employees, like benefits or payroll taxes. 

A Fractional controller is a smart move for organizations who do not have the budget for an in-house controller or only require a controller for certain tasks. 

An internal financial controller is best when you are looking to make your first full-time in-house accounting hire. And, you have the budget to support this. 

Pro Tip: Looking for more guidance on how to build your accounting dream team? Read our guide. 

3. Inquire about qualifications 

Once you’ve settled on a pool of candidates, it’s crucial to inquire about qualifications. A strong contender for the controller position will have substantial accounting and financial experience and likely a master’s degree in accounting or business administration. They may also be a certified public accountant (CPA) or certified management accountant (CMA).

Key qualifications to consider when interviewing controller candidates include:

  • Ability to communicate complex financial information to non-finance team members 
  • Knowledge of relevant procedures, processes, and information systems 
  • Strong attention to detail and ability to spot discrepancies
  • Skillful with negotiation and presentation 
  • Relevant industry insights and expertise 
  • Research-oriented approach to finance 
  • Exceptional management abilities 
  • Solid organizational skills 

***

An effective controller can help secure the long-term financial solvency of your organization—and relieve some pressure from the founder and any senior business leaders in your company. If your business is experiencing rapid growth, is grappling with recurring financial errors, or simply requires a financial leader to take the reins, it might be time to hire a controller. 

Posted By

Wayne Richard

Wayne Richard

Wayne is a management accountant who forged a 15-year career with tech heavyweight Hewlett Packard before starting his own cloud accounting firm in Tucson, Arizona. Fate (and the Internet) brought him to discover Bean Ninjas via a blog post. Two years later and Wayne’s involvement with Bean Ninjas had grown from a blog comment to contractor to equity partner. When Wayne isn’t managing a global team and equipping entrepreneurs with the financial tools they need to enjoy business success and lifestyle freedom, he’s being an everyday superhero to his wife and five children. Wayne is Bean Ninjas resident e-commerce expert.

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