Some business owners who aren't particularly strong in financial management rely on their office staff and outside consultants to help them understand and analyze the data that could have significance for their company. If you are one of those owners, you may want better or quicker access to that information than your current combination of personnel is able to provide. Walt Mathieson, CPA, and president of Mathieson Consulting, Brookeville, Md., says, "If you find yourself getting continually frustrated because you're just not able to get the answers you're looking for from your existing office staff -- or you find yourself using costly outside consultants too often, a controller (aka comptroller) might be the answer."
John Gillespie, CFO Practice Manager of the Emerging Business Group at Geller and Company, a finance and accounting outsourcing firm based in New York City, says, "While the basic financial reporting duties may be taken care of, the analytical part may be missing. And, not only may the current staff not have the skills, but because of the demands on an office manager's time, analyzing the data may be last on their list of priorities. So it just doesn't get done. A controller could make the difference."
What it is
A controller is a key member of the management team who handles all basic financial management duties, such as preparing and understanding all financial statements, in addition to a long list of other responsibilities. A controller would work with auditors and any tax preparers, as well as take care of minor tax reports in-house.
He or she would also be very involved in the preparation of operating budgets, perform lease/buy analyses, help determine whether or not you should invest in equipment at a particular time, provide a break-even analysis, and report on the trends he or she sees -- all of which should help the owner make the right decisions for the company.
"A controller will continually ask 'what if' questions around various scenarios to help the owners make decisions," Gillespie says. "He or she provides the decision analysis piece that may not exist otherwise."
"A controller can be key for an owner who is looking to grow," Mathieson adds, "because he or she can build the internal financial management controls -- a financial 'back office' -- that would allow a company to grow exponentially and not run into problems."
When and whom to hire
Is there a particular volume that indicates whether or not a company should hire a controller? Gillespie thinks not. "It's more a combination of size and complexity than size alone."
If you feel a controller would bring a much-needed improvement to your company, Mathieson advises that you "focus on finding people with industry experience. Some have said that construction accounting is some of the most complex accounting in existence."
A controller should have a minimum of a bachelor's degree. A CPA may bring a broader base of experience to the table. But an experienced controller doesn't come cheap. Plan to pay a minimum of $60,000 to a high of more than $100,000 in annual salary. -- Victoria Downing is president of Remodelers Advantage, Fulton, Md.; (301) 490-5620; firstname.lastname@example.org.