As a small business owner, there’s a good chance that you’ve been handling a large portion of your company’s accounting department and bookkeeping tasks.

Once your company started to grow, you probably delegated some of those responsibilities to other members of your staff. Maybe you even hired a full-time or part-time bookkeeper.

When you first start a business, you can get away with this approach. But as your company scales, you need to take steps to improve your financial department.

That’s where a controller comes into play.

Regardless of your situation, there is always room for improvement. I’ll explain how a controller can do this for your small business.

What is a Controller?

A controller is a mid-level manager in your financial department. They oversee all accounting-related tasks and activities within an organization.

In large corporations, a controller would report to the head of the accounting department or to the CFO. But in a small business, controllers report directly to the CEO.

Your controller will become your go-to person for anything related to accounting, finance, and bookkeeping tasks. Often, small business owners believe that they can bypass the need for a controller.

However, a controller plays a crucial role in small businesses, especially for growing companies.

Who Needs a Controller?

Not every small business needs a controller.

If you just launched a startup, then a controller won’t be at the top of your priority list. If your entire company is just five or six people, then you won’t need a controller either.

But as your company scales and your bookkeeping tasks become more complex, a controller can make your life as an owner much easier.

Another way to bring the responsibilities of a controller to your team is by outsourcing the service. Firms offering outsourced bookkeeping services and interim CFO solutions offer the role of a small business controller as well.

Responsibilities of a Controller

The day-to-day life of a controller varies based on the company and its needs. Some of the tasks below will be completed by a bookkeeper and overseen or managed by a controller.

But here’s a typical list of services that a controller will perform for small businesses.

Accounting and Cash Flow Maintenance

A small business controller will assist with daily accounting tasks. They can process your payroll, as well as manage accounts payables and accounts receivables.

Controllers also manage and oversee daily cash flow tasks, which are crucial for small businesses.

Depending on your situation, bringing a controller on board will alleviate some of your existing responsibilities. Even if you have one or two employees working on these tasks, a controller will improve any inefficiencies and take on some of the responsibilities.

Implement Bookkeeping Policies

Most small business owners don’t establish official accounting procedures when they first launch a startup. While it’s obviously in your best interest to do so, you can get away without having firm bookkeeping policies for a while.

With that said, once you get serious about expansion and growth, you need to have a concrete accounting policy in place.

Over time, these rules and procedures will change with your business. A bookkeeper will help implement your bookkeeping policies and keep them up to date as your company evolves.

Financial Management Reporting

How do you know the current health of your business from a financial perspective?

The only way to figure this out is with financial reporting. However, generating key financial reports is time-consuming. If you’re doing this on your own, it can be tough to find enough time to get it done on a regular basis. Plus, without formal training, your reports may not be completely accurate.

This puts you at a disadvantage when you need to make crucial business decisions.

With a small business controller, you won’t have to worry about these tasks. They formally close the accounting period, post adjustments to the balance sheet and generate financial statements. A controller can make you aware of any potential bookkeeping issues before they get out of hand.

Human Resources Tasks

Most small businesses do not have a dedicated human resources department. You’re probably handling HR responsibilities on your own.

Controllers can do things related to:

  • Answering questions about employee benefits
  • 401(k) activity.
  • Manage employee files.
  • Assist with hiring and training of new employees.

Basically, a controller can take on the role of an HR manager once your business scales and HR tasks become more complex.

Establish an Accounting Department

Right now, your entire accounting department might just be you. But fast-growing small businesses will eventually need to bring in new members to their accounting team.

You can’t handle all your bookkeeping and financial tasks on your own forever.

Once you start hiring a few employees, you can bring in a controller to help oversee any additional expansion in the accounting department.

If you plan for your accounting staff to go from three employees to 12 employees over the next few years, you’ll need some help with this process. Controller services can make sure the expansion goes according to plan.

Implement Software

Bookkeeping software will make your accounting process more efficient. Your bookkeeper will spend less time handling manual data entry, and more time focusing on important tasks.

But what software should you use? What features do you need? Who is going to train your employees to make sure they know how to properly use this new technology?

A controller will handle all these responsibilities. They know about all of the best cloud-based accounting solutions on the market today and they’ll select the perfect option for your small business.

Audits

Do you need an audit?

Controllers will tell you the best time to perform internal audits. These can be small, and department specific as well as large audits of the entire company.

Not only will a controller let you know when to conduct audits, but they’ll also be available to facilitate and complete the tasks associated with an audit as well.

A controller can even prepare for an IRS or third-party audit.

Conclusion

There comes a point in every small business owner’s life when their daily tasks become seemingly insurmountable.

At times, it may be difficult for you to delegate responsibilities to others. But your company will never be able to grow effectively if you’re the one doing all the work.

As your small business scales, the bookkeeping department will become a top priority. That’s when you should consider hiring a controller.

Use this guide as a resource to help you determine when your small business is ready for a controller. Alternatively, you could consider an outsourced bookkeeping service for assistance with the responsibilities listed above as well.