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When Does Your Startup Need An Accounting Controller?

Accounting controller, financial controller, director of accounting — these are three different ways to describe a finance guru who oversees accounting managers, accountants, and clerks/bookkeepers.

But what does a financial controller do? And how do you know if you need one for your business?

The entrepreneurs we work with often ask us whether they need an accounting controller role in their accounting function.

We know that when it comes to running your own business, your financials can be overwhelming. Let’s look at two common reasons you may need to hire a controller:

1. You’re required by someone else.

You may be required to get an accounting controller when you are, as a lawyer would say, “party to an agreement that requires U.S. GAAP financials.”

What does that mean in layman’s terms? The most common agreements that we see require GAAP accounting are: preferred stock investment by a venture capital firm; bank loan; SEC filer; government or private grant; an agreement that requires U.S. GAAP explicitly; and an agreement that requires an ‘audit’, ‘review’, or a ‘compilation.’

2. You want more than your current bookkeeping is giving you.

Here are a few signs it’s time to upgrade your bookkeeping to an account controller: 

  • Upfront payments. Upfront payments tend to be a big culprit – while the customer funding is great, it distorts a clear picture of your financials because that might need to last 3 months or even a year. A controller can help manage deferred revenue.
  • Scorecards. A financial controller can develop and update your business scorecard so that you can track your industry’s financial data.
  • Budget and cash flow forecasting. If it’s time to develop a budget or cash flow forecast, and you need a financial controller to help keep it current.
  • Director of accounting. Maybe you have a bookkeeper or clerk, and you need an accountant to oversee everything. An accounting controller is a strong leader who can answer any and all accounting questions appropriately for you team.

What is included in accounting controller responsibilities?

A day in the life of an accounting controller is client-focused and surprisingly fluid.

While responsibilities vary, as director of accounting, their primary role is to oversee all of the accounting-related activities within a company, which means their day-to-day work often includes the management of people, departments, and company policies.

In addition, accounting controllers may review work and current processes, prepare financial statements, consult with management to make data-driven decisions, and build new, streamlined systems to help the company perform as efficiently as possible.

Accounting controller hierarchy

Is there a difference between a bookkeeper and a controller?

Yes. While bookkeepers typically keep up with the weekly tasks, such as accounts payable, receivable, and cash reconciliation, financial controller skills are more advanced.

As the director of accounting, controllers oversee the accounting function, ensuring that systems are efficient, work is completed correctly, and the company is making the best decisions possible.

How much does a financial controller cost?

So you either want or need a director of accounting…now what?  Well, just because you need a controller, that doesn’t mean you need to go out and spend $85k-$120k on a financial controller salary – and that’s before you load the cost up for benefits and all the rest. So, what are your options?

The thing is, with technology continuing to improve, you can implement stronger processes and drive out the people hours. It’s called implementing an outsourced financial controller service. This ensures that you don’t need any of these roles full time for much of your early life cycle – many startups grow to $5M in revenue before needing a full-time person at each level.

And this is part of our accounting offerings at Acuity – outsourced financial controller services. Many clients choose to add a part-time controller to their bookkeeping plan for a myriad of reasons.

What are some real examples of how an accounting controller could help my business?

Perhaps the best way to show how an Acuity controller can help is by going through some of our work with clients! See three examples below:

1.Circumstance – Venture Funding: One of our clients was using our $449/month basic bookkeeping service plus bill pay. They received a term sheet from a venture capital firm and closed a $3 million round, which requires a financial statement audit.

How We Solved It: We supplemented the bookkeeper with a fractional controller. The controller was involved in the company on a weekly basis or an additional $2,400/month to keep the total accounting cost in line with a $36,000 FTE.

2.Circumstance – Upfront Payments Throwing Everything Off: One of our clients was using our $449/month basic bookkeeping service. They received upfront payments that were distorting the financial picture.

How We Solved It: We supplemented the bookkeeper with a fractional controller. The controller was involved on an ad-hoc basis for $115/hour, an additional $115-$575/month, depending on how many new contracts come in each month.

3.Circumstance – Acquisition: One of our clients was using our $449/month basic bookkeeping service. They were acquired by a Fortune 100 company.

How We Solved It: We supplemented the bookkeeper with a fractional controller. The controller was involved daily through due diligence and monthly, post acquisition, during the transition.

Click here to learn more about how Acuity can help you create an accounting plan that fits both your business’ budget and financial needs.

Acuity Bookkeeping

Our accounting experts are ready to help you.

Acuity has a great team of expert bookkeepers, controllers, and CFOs, each passionate about helping entrepreneurs and startups reach their financial potential.

We recognize that part of reaching your business goals includes freeing up some of your precious time. That’s why at Acuity, we’re consistently implementing new processes and technologies to streamline systems and simplify your daily tasks so that you can focus on what you do best: growing your business.

Think your business may benefit from (or require) a financial controller? Book a time on Tyler’s calendar to get started today.