Controllers have one of the most important – and overlooked – jobs in finance. Think about it. Have you ever had a little kid tell you that he wants to be a controller when he grows up? Controllers may not have the exciting or glamorous image of firefighters, doctors or professional athletes. But in the grownup world that most of us live in, a controller’s job is vital to the health of a business or organization.

First, it’s important to realize what a controller is supposed to do. A controller is not just a glorified bookkeeper. They are expected to do much more in their roles. 

A good controller should be managing cash flow through budgets and projections, not just reconciling your bank statement. If you are struggling with cash, a strong controller will be able to jump in and help. He or she should also be in charge of identifying expenses that seem out of line when compared to budget/expectations. Because your controller is in charge of your books and sees them every day, he or she is the best person to spot when something is off.

Your controller also should be in charge of presenting management reports to the leadership team. Again, since the controller should be very familiar with the books of the company, he or she should know what metrics best measure the results of the company.

So what traits does a strong controller possess?

• A strong background of accounting and finance knowledge. A good controller for a small business should have at least three years of general ledger accounting experience, either in industry or public accounting. This base-level knowledge allows the controller to review the books efficiently and thoroughly, as well as to help train staff.
• An ability to see the big picture. Most people view accountants as very detail oriented and methodical, which is because many of us are! But a good controller can lift his or her head out of the details to see how the numbers relate to the operations of the company. This is what will allow the controller to prepare meaningful management reporting.
• A controller should have the ability to train and lead an accounting staff. Contrary to how many small businesses operate, the controller should not be responsible for entering day-to-day transactions of the accounting department. Rather, he or she would oversee a staff member or members and review their work. This allows for more effective controls (cleaner books and less opportunity for errors or fraud). The controller should be able to effectively manage this team and train junior staff. This will also allow for more time to do analysis and budgeting, not just bookkeeping.

How do you know if you have an effective controller in place?
Since most business owners are not accounting majors, it can be difficult for them to evaluate whether or not their controllers are doing a good job.

Here are some issues to look for to determine if it might be time for a change:

• Cash flow struggles (late payments/non payments, slow collections of receivables)
• Lack of consistent monthly reporting (should have standard reports monthly by the 10th of the following month)
• Reporting that seems “off” (sales seem too high/too low, net profit seems too high/too low)

And since I happen to run a firm that specializes in outsourced CFO and controller services, it would be wise of me to mention that instead of hiring a new controller, you might want to consider outsourcing this service, particularly if you don’t have the need for someone full time!  

Robert J. Rickert CPA, PC focuses on giving its clients timely, accurate and relevant financial information to help them make informed decisions about their businesses. The firm provides customized solutions to meet the specific needs of its clients. Services offered by the firm include CFO and controller services, crisis management, interim financial management, acquisitions and business buying, divestitures and business selling, litigation support, business tax services, and tax dispute assistance for individuals. For more information, visit rickertcpa.com, call 910-319-9127 or email [email protected].