What Is A Financial Controller And Does Your Startup Need One?

A financial controller is a seasoned accounting professional who is responsible for the financial operations, management, and regulatory compliance of a company.

It’s not uncommon for startups to use a DIY bookkeeping process or hire a part-time bookkeeper to save money when they’re first starting out. But as the business grows, its finances become more complex, or its gearing up for a big fundraise, it may be time to consider bringing on the support of a controller.

‍

What Does A Controller Do?

Controllers oversee every aspect of a company’s financial operations. The functions of a financial controller vary across companies depending on the business size, complexibility of the business, and industry. They often include (but are not limited to):

• Financial management and regulatory compliance

• Overseeing accounting and record-keeping operations, including preparation of reports and financial statements (Profit & Loss or Income Statement, Balance Sheet and Cash Flow Statement)

• Handle insurance and risk management policies

• Prepare, monitor, and update budgets and forecasting

• Managing other business-wide functions, including IT, human resources, insurance, tax strategy, sales tax reporting, and federal income tax reporting, among others

Regardless of the above considerations, there are a number of key responsibilities and skill sets a good startup controller should embody:

‍

Solid grasp of accounting and compliance best practices

As the leader of your startup’s finances, a controller must know the ins and outs of accounting and compliance best practices; from reporting structure and audit trails, to the best vendors and fintech tools, to proper permits, licenses, or operating requirements for your business.

A controller must also have meaningful expertise surrounding Generally Accepted Accounting Principles (GAAP) and be fluent in accrual accounting method, the required financial reporting standard for businesses earning $5M or more in annual revenue. 

See also: SaaS Accounting Basics: A Comprehensive Guide for SaaS Startup Founders

Develop and implement financial policies and processes

As you strategize to grow your business, you'll require a deeper understanding of your cash flow and how to better manage it. You’ll also need to ensure your financial operations are compliant to various local, state, federal, global, and/or industry-specific accounting laws and standards.  

A controller develops and implements financial policies and processes that are both tailored to your company's needs and goals, and manages these internal controls within compliance to ensure your business is running audit-ready financial operations. 

Strong communications and management capabilities

The controller oversees all employees involved in the accounting process, including accounts receivable, accounts payable, payroll, inventory, and compliance. They also act as the link between the businesses' financials and other managers and executives. 

For this, strong communications skills and a leadership mindset are important to improve the company's financial functions, motivate the accounting team, and communicate with stakeholders at the most senior level of a business.

Anticipate management’s needs

Beyond ensuring the basic day-to-day accounting tasks and financial reporting are completed accurately and in a timely manner, a good financial controller anticipates the information needs of management, and provides timely financial data, analysis, trends, and recommendations based on these needs.

What qualifications should a controller have?

Numerical proficiency, organization, good problem-solving and analytical skills, and excellent use of logic are important traits and skills of a controller. When it comes to more formal qualifications and certifications, there are two notable requirements:

Ample experience directly related to your industry

The role of financial controller is an intensive one and requires between 7-10 years of experience. It's important they have a strong background in accounting and applicable experience in your specific industry or business vertical. 

CPA, CA, or CMA credentials

A financial controller is usually a Certified Public Accountant (CPA), Chartered Accountant (CA) or Certified Management Accountant (CMA), meaning they have specific knowledge in financial planning, auditing, and general accounting functions. A four-year bachelor's degree in accounting, finance, or business administration is often required.

See also: Hiring an Accountant: 10 Interview Questions to Ask When Hiring an Accountant

How is a controller different from a chief financial officer (CFO)?

It’s not always obvious which roles you should be hiring for in your company or when to do so. For many high-growth startups, hiring for the financial side of a business presents its own set of complexities, among them whether to hire a controller or a CFO. 

In short, the key distinction between a controller and CFO are as follows:

A controller oversees the accounting operations of a company, while a CFO is the senior executive responsible for managing the financial actions of a company. 

Read more: CFO vs. Controller: What's The Difference (& Why Does It Matter For Your Startup?).

Does your startup need a controller?

As your startup grows and accounting needs become more complex, it often becomes necessary to hire a financial controller to manage the ledgers and ensure full compliance.

A few signs your startup is ready to hire a controller include: 

• Your startup is lacking accurate and timely financial insights and data, and often struggles to meet month end close deadlines

• Your startup is experiencing rapid growth and expansion—resulting in more complex business accounting needs

• You need more analytical support and strategic guidance to understand the financial effect of certain business decisions (e.g. expanding into new geographies or exploring new revenue models)

• You're raising funds from venture capitalists or institutional investors, and need more accurate, thorough financial processes and reporting

• Your annual revenue is approaching $5 million, meaning your startup is subject to new accounting standards and reporting requirements as dictated by the IRS or SEC

See also: When Should Your Startup Hire a Controller? 

Consider Zeni for your startup’s controller needs

For early stage startups that need to put better processes and guardrails around their startup finances, but don’t quite need a full-time controller, a solution like Zeni is a great choice. 

Zeni is capable of performing all of the core tasks of a controller, plus those of a bookkeeper, accountant, tax specialist, and CFO. With Zeni, startups have access to every type of finance expert they might need, all working on the same platform and e team.

‍

Working with Zeni means:

• Finance Concierge: 24x7 access to a team of fully-certified bookkeepers & accountants, controllers, CPAs, tax advisors and data analysts with more than 100 years of collective experience
  ‍
• Daily Bookkeeping: Accurate bookkeeping completed daily using GAAP standards, with full monthly close process completed within 5 business days of month-end
  ‍
• Real-time Finance Dashboard: Access to a real-time finance dashboard designed to give founders, or anyone who is operationally running a company, real-time visibility into your company's finances in a very approachable and intuitive way
  ‍
• AI-powered Insights: Proactive insights which identify and flag changes to your company's finances in real-time so founders can make informed, real-time decisions
  ‍
• Unbeatable Pricing: Startup-friendly cost structure based on your company's monthly expenses (no hourly fees, no surprises)
  ‍
• AI-Powered: Speed, efficiency and accuracy guaranteed by our seamless blend of artificial intelligence, machine learning, and human experts
  ‍
• Out-of-Box Integrations: Seamless integrations with your entire existing finance stack; our only requirement is use of Quickbooks Online
  ‍
• Optimized Tax Filings: Annual federal, state and local taxes automatically optimized and filed with ease (including R&D Tax Credits)
  ‍
• Full Service: End-to-end management of accounts payables and receivables, including payment reminders and collections. Automated payroll administration and employee reimbursement processes. Solutions-oriented recommendations of streamlined, cost-effective processes and/or software solutions for your company's needs
  ‍
• CFO Services: Financial projections and analysis (FP&A), including forecasts and budgets, scenario modeling, created with your input and guidance
  ‍

From monthly bookkeeping and accounting services to controller and CFO services, Zeni is the full-service solution your startup needs. Schedule a demo of Zeni today!