A controller is the financial linchpin at your company because their accounting capabilities cover such a broad scope. Their reporting expertise and management skills ensure immediate access to a realistic snapshot of the financial health of an efficiently run business.
Not all businesses can or will employ full-time controllers. These companies will often work with fractional controllers on a project basis.
We have found nine clear indicators that it is time for your business to hire a fractional controller. Before we dive into those indicators, let’s consider what a Controller should be doing for you.
Capabilities you should expect from a Controller
Controllers are senior-level executives who are responsible for all accounting-related activities at companies of all sizes. The controller may be the highest-ranking accountant at some small to medium-sized companies, supervising bookkeepers and junior-level accountants. At larger companies, controllers will often report to the CFO.
A controller’s responsibilities are wide-ranging and should include:
- Hire, train and manage the accounting department
- Supervise audit preparation and coordinate with external auditors
- Accounting software expertise
- Implementation of internal policies, including tax planning and compliance
- Financial analysis and reporting, to include:
- Balance sheets
- Income statements
- Cash flow reports
- Financial projections
- Internal and external financial statements
- Oversee year-end tax planning
1) You’re expanding your business.
Are you considering expanding your product line? A fractional controller can perform an industry analysis to confirm that your goal is a money-making proposition. Then, they can analyze whether your existing business has the cash to support the new line and what your return on investment would be.
2) You’re struggling with cash flow forecasting
Fractional controllers are expert- trained in cash flow forecasting. Business owners often are not, and bookkeeper functions typically do not extend to cash flow projections. Poor cash flow management can send once-profitable businesses crashing into the ground in a heartbeat. A fractional controller will be able to identify the sources of your cash flow problems and make recommendations for both short and long-term solutions.
3) You are considering a transition to new accounting software
Fractional controllers have experience working with companies of all sizes using accounting software of all types. If you have outdated software and are looking for a recommendation for the best fit for your company, using a fractional controller’s input is a great place to start. After installation, the controller can mentor your staff as they transition into the new software.
4) You don’t currently need a full-time Controller
Perhaps you’ve hired temp employees in the past. A fractional controller is a similar concept. The fractional controller works onsite with you until the project is complete while employed by an outside firm. You do not take on the additional cost of salary or benefits. A fractional controller can provide oversight during year-end or handle any financial reporting you may need on a project basis.
5) Your accounting staff is overworked
Many accountants are naturally driven to make your business run effectively and are easily frustrated by inefficiency. For example, some companies may employ a CFO and bookkeepers but no controller. Others may have a bookkeeper as their highest-level accountant in the early stages. While there is nothing inherently wrong with set-ups such as these, if you and your employees become concerned about inefficiency, it may be time to bring in a fractional controller to get things back on track. A fractional controller can help you get caught up on reporting or help you put new policies in place to develop a more efficient accounting department.
6) You need support during a significant short-term transaction
The expert support of a fractional controller can be highly beneficial to your company during a merger, acquisition, or while raising capital. First, these are all times you may not wish to add full-time salary costs to your balance sheet. Second, the watchful eye of an additional controller can help prevent costly mistakes during one of the most critical transactions in the history of your company’s existence.
7) You are facing an audit
Only about 1% of business owners get audited, so you can likely breathe easy if you’re following the rules. The IRS stated it plans to increase its audits by about 50% for the tax year 2021. Even if you believe that you’ve been fully compliant, an audit is a time-consuming and stressful process. Fractional controllers supervise the audit process and coordinate with external auditors. They can support or direct your internal employees until the audit is complete so that you can breathe easily.
8) There are interpersonal conflicts amongst your staff
Successful business owners have an entrepreneurial spirit and are laser-focused on representing their brand and driving revenue. However, as the business grows, there is potential for the owner to lose touch with employees. Often, legitimate grievances develop amongst staff members and go unresolved. A fractional controller who has strong social skills can mediate these relationships while assisting with additional accounting tasks.
9) Your financial policies and controls need to be improved or updated Rock-solid financial controls both ensure efficiency and protect your organization from fraud. A recent case of fraud or inefficiencies in financial reporting are both clear indicators that it’s time to bring in a professional to examine and update your financial controls. A fractional controller can assess your organization’s preventative gaps and help you improve detective techniques to catch any future errors.
Why a Fractional Controller?
Delegate. Delegate. Delegate.
There’s always a good reason that these indicators pop up. A business owner can only dedicate their time and resources to so many things at once. If you’re an expert in marketing your business and focusing on promoting your brand, then it makes perfect sense that the accounting department could begin to lag for a brief period.
By hiring a fractional controller, you can delegate these duties to an accounting expert while focusing on using your core competencies to grow the business. A fractional controller can even mentor your accounting employees on how better to delegate within that department.
Nperspective CFO & Strategic Services: What makes us different?
Nperspective is a Florida-based business with a hands-on approach to making your business run effectively and efficiently. Our fractional controllers are hand-selected for your company based on project type, background, and personality fit. With decades of experience and versatility, we will find a personality match for your project.
Learn more about our team.
Our controllers will work onsite with your employees until we complete the project to your satisfaction. We value integrity and availability, as we know you do as well.
If any of these nine indicators sound familiar, or if you’d like to learn more about our fractional controller services, contact us today.