Financial jargon can make simple concepts difficult to navigate. In this “Does My Business Need…” series, we define common job titles to help you determine what financial service is best for your business. In this post, we’ll explore what a financial controller is, what value they can add for a business, and how a business can hire a highly skilled controller.
What is a financial controller? What does a controller do?
Primarily, a financial controller is an executive who oversees the accounting functions of a business, ensuring that a company’s ledgers are accurate and adhere to financial regulations. Also known as a comptroller or accounting controller, they create and supervise the processes for recording a company’s finances. They also confirm that data is submitted correctly and on time. Financial controller services include:
- Accounting team management: Supervising the finance team and managing operations to ensure accurate and timely reporting
- Inventory accounting: Monitoring, valuing and tracking inventory assets
- Revenue recognition: Creating and applying controls for monthly financial reporting to ensure compliance
- Establish formal financial procedures: Spearheading development, implementation and optimization of processes such as data collection, budgeting and month-end close
- Month-end close: Enabling accurate reporting and analysis, and providing insights on the company’s financial position.
That said, a financial controller does not deal solely with the accounting team. A controller also serves as the liaison between a company’s finance team and senior management, as they regularly use complex financial data to offer strategic insights to internal stakeholders. Controllers are skilled communicators who can link company finances to overall business objectives and goals.
In many ways, a financial controller can have duties on par with that of a Chief Financial Officer (CFO). In small- to medium-sized businesses (SMBs) in particular, the controller and the CFO are often the same person. Some of the CFO-level roles a financial controller might take on include:
- Business budgeting and forecasting: Predicting a company’s future financial position based on trends in past financial data
- Software rollouts: Implementing procedures and ensuring accurate data migration for accounting functions using internal and external software
- Risk evaluation: Identifying and analyzing potential events that may negatively impact the financial position of a company
- Due diligence in mergers and acquisitions: Reviewing and investigating a potential deal or investment opportunity for the business
Simply put, the financial controller is a company leader who will implement the right accounting processes to ensure accurate books, optimize the effectiveness of a company’s accounting team, and provide financial analysis and recommendations to executives.
Skills and expertise to look for
A good financial controller anticipates the information needs of management and provides timely financial data, analysis and recommendations. They absolutely must know the ins and outs of accounting best practices while maintaining technical acumen and strong communication skills. Let’s break these down further:
- Expertise in accounting processes: A financial controller often has 10+ years of experience in an accounting/auditing firm in addition to an MBA or master’s degree in accounting. A controller is also usually a Certified Public Accountant (CPA) or Certified Management Accountant (CMA), meaning they have specific knowledge in financial planning and analysis, auditing and general accounting functions.
- Technical skills: Artificial intelligence and machine learning models have made it possible to advance an accounting team’s functions beyond those offered by a simple Excel workbook. While controllers do not need to have in-depth knowledge of these complex programs, they do need to understand how to use them to maximize an accounting team’s efficiency.
- Leadership skills: A financial controller needs to motivate their accounting team and communicate with stakeholders at the most senior level of a business. They must know the accounting team’s functions and ledgers by heart and be able to succinctly translate this large amount of data into strategic insights to support the overall business.
When sourcing a full-time or part-time controller, be sure to look beyond someone with only technical accounting knowledge. You should also be searching for someone with the leadership mindset to improve your company’s financial functions. Some questions to ask a potential controller candidate include:
- What are some procedural improvements you’ve made to the accounting team in your previous roles?
- How have you increased revenues/lowered expenses for previous companies you worked for?
- How do you like to communicate financial results to key stakeholders?
- What approach would you take to leading and motivating a team?
At Paro, we provide businesses with highly vetted financial controllers who are best suited to tackle your specific challenges and opportunities. Our experts average 15 years of experience, and many have worked for the Big Four, so you can have confidence you will only be matched with financial controllers who have the expertise and leadership you need for your business.
When to hire a controller for your business
Many SMBs initially choose to save money by maintaining a hands-on approach to managing their own finances. However, as the business grows and accounting needs become more complex, it often becomes necessary to hire a financial controller to manage the ledgers and ensure full compliance. If your business is experiencing any of the following, it’s time to consider hiring a controller:
- The business is growing rapidly, and leadership is uncertain of the financial effect of certain business decisions like buying a new facility, exploring a new revenue stream, etc.
- The business is lacking accurate and timely information on the financial condition of the company, often struggling to meet month close deadlines
- The company’s accounting team is quickly growing but lacks oversight/management
- Leadership should be focusing on business development but is instead spending its time on basic accounting
- Leadership needs assurance that they are in full compliance with state, local and federal tax regulations
- The business has large amounts of inventory and receivables that need to be managed with both an accounts payable and accounts receivable manager, respectively
These are just a few examples of situations in which a business could benefit from the leadership of a financial controller. The controller’s role can differ based on the needs of each company. When you outsource with Paro, you can define the role to your company expectations and gain a leader who will provide the financial expertise needed to help your business grow. Outsourcing with Paro can also save money on recruiting, overhead and other costs.
Where to find an expert outsourced controller
At Paro, we leverage our proprietary AI technology to build flexible, focused teams of remote experts that help companies solve problems and drive growth. Our laser focus on finance allows us to quickly identify experts across the U.S. with the right mix of skills, credentials, and experience to achieve each company’s specific goals. Request a consultation and get one step closer to gaining the financial controller leadership you need.