Fractional Controller

Financial Controller

What Is a Fractional Controller?

A Controller is a professional who handles the financial accounts within an organization. 

This includes ensuring the accuracy of financial reporting, interpreting data, and providing findings to executives. Controllers also ensure compliance with all federal, state, and local financial laws. They make sure the business is maintaining profitability in a legal manner. Typically, Controllers will hold the top financial position within a business.

A fractional Controller is a consultant who functions as a Controller on a part-time basis. They may report to a firm’s chief financial officer. Both roles may also be combined in a small business.

What Does a Fractional Controller Do?

The duties of a fractional Controller are very similar to that of a full-time hire, however, the time commitment will vary based on the duration of the project and business needs.

A Controller is responsible for the finance operations of a company. This includes financial reporting and maintenance of an adequate system of bookkeeping records.  Not to mention a comprehensive set of controls and budgets designed to mitigate risk. All records produced must enhance the accuracy of the company’s financial results. Furthermore, reported results must be compliant.

The scope of the Controller is larger in a small business. The position is also responsible for cash management and risk management. In a larger company, the additional responsibilities are shifted to a treasurer or CFO. 

How Do a Controller and CFO Differ?

Those in upper-level finance roles may be confused by the terms CFO and Controller. While you might assume that both are the same because each title requires a finance background, the roles are actually extremely different, according to Proformative.

As a Controller, professionals are committed to accurate reporting, formatting reports, budgeting, compliance, financials, tactics, and what is currently going on in the organization. A CFO is responsible for analyzing records, forecasting, spotting key indicators, implementing budgets, strategy, and how financial status affects the big picture. It is typical for professionals to go from a bookkeeping role to a Controller role. 

If your business needs a Chief Financial Officer or you’re not sure you need a Controller, Johanna Kimball also offers Fractional CFO services as an option. Click here to read more about hiring an Interim CFO.

How Can Your Company Use a Remote or Fractional Controller and What Are Their Principal Duties?

There are numerous ways that companies use the services of a Remote Controller. One of the great benefits is that he or she can work on tasks that will bring you the most benefit. Some possible job duties include:

Management

  • Maintains and enforces a documented system of bookkeeping policies and procedures
  • Manage outsourced functions
  • Oversee the operations of the finance department, including the design of an organizational structure adequate for achieving the department’s goals and objectives
  • Oversee the finance operations of subsidiary corporations, especially their control systems, transaction-processing operations, and policies and procedures

Transactions

  • Ensure that accounts payable are paid in a timely manner
  • Make sure that all reasonable discounts are taken on accounts payable
  • See to it that accounts receivable are collected promptly
  • Process payroll in a timely manner
  • Confirm that periodic bank reconciliations are completed
  • Check that required debt payments are made on a timely basis
  • Maintain the chart of accounts
  • Keep an orderly bookkeeping system
  • Preserve a system of controls over transactions

Reporting

  • Issue timely and complete financial statements
  • Coordinate the preparation of the corporate annual report
  • Recommend benchmarks against which to measure the performance of company operations
  • Calculate and issue financial and operating metrics
  • Manage the production of the annual budget and forecasts
  • Calculate variances from the budget and report significant issues to management
  • Provide for a system of management cost reports
  • Contribute financial analyses as needed, in particular for capital investments, pricing decisions, and contract negotiations

Compliance

  • Coordinate the provision of information to external auditors for the annual audit
  • Monitor debt levels and compliance with debt covenants
  • Comply with local, state, and federal government reporting requirements and tax filings

Other Accountabilities

  • If the company is publicly held, the Controller may be responsible for the filing of quarterly and annual reports with the Securities and Exchange Commission
  • If the company is a small one, then the Controller may likely assume the responsibilities of the chief financial officer

The Key Benefits of Outsourcing an Interim Controller

Hiring an outsourced fractional Controller provides benefits you wouldn’t get with an in-house Controller. For instance, CEOs won’t have to spend time supervising, staffing, and documenting processes. 

When it comes to staffing when hiring a fractional Controller your company is less likely to experience points of failure. If in-house finance staff were to get sick, leave for vacation or quit, do you have a system set in place to operate seamlessly in their absence? If not, your business can run into issues when it comes to key cycles like month-end close. Not to mention supervising accountant and bookkeepers work, and picking up imperative workloads.

When using an interim Controller, there is a system set in place in the event that a new Controller can step in and take over. Your business will also save the time spent searching for the ideal candidate. Not to mention the cost savings that arise as a benefit of hiring a remote Controller.

The right Controller for your business should be an experienced professional and a finance degree. Be sure to check their credentials since some professionals may carry the title at companies without obtaining a degree.  

In-house Controllers should be aware of best practices, but their company might not require regular training. This can lead to lower industry knowledge. Remote Controllers are immersed in new practices regularly for superior knowledge. An interim Controller will provide expert knowledge and guide decisions that will help your business grow.

The number of reports your business requires will depend on your business goals and needs. A benefit to hiring a part-time Controller is they know how to produce the financial reporting required by your business. If there is a reporting requirement your fractional Controller isn’t familiar with, they have the resources to complete it. Interim Controllers have the knowledge to produce accurate, timely, and meaningful reports.

Interim Controllers oversee staff to make sure policies and procedures are followed for quality. Documentation of procedures also allows for other Controllers to easily step in and take someone’s place if they are sick or out of the office. That way there are no financial gaps left and business can continue as usual.

When Is the Right Time To Hire a Fractional Controller?

Outsourcing your Controller function can provide expertise your business might not currently have. If you are missing timely reports or you have to spend time on bookkeeping instead of growth, it is probably time to consider hiring an interim Controller.

Typically in a small company, the CEO wears many hats. A Chief Executive may be the head of sales, operations, marketing, development, and HR. All while maintaining other chief roles like that of a COO. Although this may work in the beginning, as a company grows and becomes more complex it is not sustainable over time. The typical startup climate requires flexibility from team members and chief staff.

And one of the best qualities of a remote Controller is flexibility. You can hire an Interim Controller for just several hours per week if that is all you need. The right time to start working with one is whenever you have a need for Controller services.

Consider starting with a Controller consultant on a short-term, limited basis to determine how much value they can bring to your business. If you need someone to fill the Controller role but aren’t sure you need a full-time individual, a part-time professional is the right choice. You can engage a Part-time Controller full time on an interim basis if needed. This will provide you with a chance to test your needs and the impact of your remote Controller’s services.

In short, interim Controllers are great for businesses of various sizes and in differing stages of growth. Since you don’t have to make a long-term commitment right away, starting with a trial run is a good move.

Find Your Next Remote Controller

Having a Fractional Controller is an excellent way to get the valuable benefits of a Controller without the sizable cost. This service can also be a useful opportunity to try out the Controller role without having to commit to a full-time hire. If you have been wondering if your company needs a Controller, but aren’t committed yet, a Fractional Controller is the solution.

Johanna is an experienced executive who can provide the Fractional Controller services your business needs. Johanna’s services include the following and much more:

  • Budget, forecast and financial analysis
  • Financing strategies and implementation
  • Revenue management and cost of sales
  • Board reports and presentations
  • Tax planning and reporting
  • Contracts
  • Bookkeeping and financial system setup and operation

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https://www2.deloitte.com/us/en/pages/audit/articles/role-of-the-controller.html

https://www.bookkeepingtools.com/articles/2017/5/14/controller-job-description

https://www.growthforce.com/blog/outsourcing-controller-services-pros-cons

https://www.topbookkeepingdegrees.org/faq/what-is-a-controller-in-bookkeeping/