An outsourced controller is a financial expert who helps keep your books up-to-date. They also provide financial reporting and information in a timely manner.
Controllers can be in-house or outsourced. If the controller is outsourced, this typically means they are an independent contractor part of an external professional outsourced financial controller organization instead of being a W2 employee in your organization. In most cases, choosing an outsourced controller affords an organization a more experienced controller at a lower cost compared to hiring a comparably-experienced financial controller in-house. This is because the organization only pays for the work needed instead of the higher cost and benefits associated with a full-time, in-house employee.
What Does an Outsourced Controller Do?
While many controller roles vary based on the company for which they work, there are general similarities of controllers across industries and company types.
An outsourced controller may be working as a stand-alone expert for an organization to organize books and get reporting up-to-date, or they may be in a supporting role for a strategic CFO for projects such as determining cash flow issues, implementing new accounting systems, or helping raise capital.
In general, an outsourced controller’s main expertise is in tracking financial data and in reporting.
A financial controller’s main duties and responsibilities include:
- Managing information technologies
- Financial & regulatory compliance
- Accounts payable/accounts receivable
- Cash balances
- Financial report preparation
“Information is what turns business into a game of strategy instead of a game of chance.”
Why Would an Organization Need to Hire an Outsourced Financial Controller?
An organization will usually turn to an expert outsourced controller when they need assistance in financial data collection or in reporting. For instance:
1. Your Company Has Trouble Closing their Books on Time
In any organization from start-up to enterprise, information is key to making all major decision (or even minor ones). Data is integral for knowing where you are, where you’ve been, where you’re going, and how (and when) you will get there. Information helps the organization analyze opportunities and make decisions based on historical data or fact as opposed to making a guess. Information is what turns business into a game of strategy instead of a game of chance.
2. Your Organization is Experiencing Cash Flow Issues
If a company is experiencing cash flow issues, such as not having enough cash to pay employees, having high AR or AP, having out-of-control coats, or tight margins, a company will often hire an outsourced controller. The controller will be able to help organize and distill information that a CFO can then use to make strategic adjustments.
3. Your Organization’s Books are a Mess
If your organization’s books are a mess, it could be due to a variety of reasons. You may have grown too quickly to keep information up-to-date and well organized. Maybe your organization never had financial systems in place until now, or perhaps you’re raising funding and realize you need clean, accurate books to approach potential financiers. Whatever the reason, an outsourced controller may be the right solution. An outsourced controller can take disorganized, inaccurate, or incomplete books and fix them. This service may often be in conjunction with an outsourced CFO who can help define and implement financial systems to keep books organized and easy-to-manage in the future.
4. You’re Raising Capital or Preparing for a Merger or Acquisition
If your organization is preparing to raise capital or preparing for a transaction, you may enlist the help of an outsourced controller to ensure your books are clean, organized, and up-to-date. They will also be able to help poultry financial data that may be needed during due-diligence.
Why Hire an Outsourced Controller over an In-House Controller?
You May not Have Enough Work to Keep a Controller Busy Full-Time
One of the main reasons organizations prefer an outsourced controller is that they may not have enough needs to justify a full-time employee. Many organizations hiring an outsourced controller have not had a controller on staff before and use an outsourced solution as a stepping stone while they grow big enough to justify an in-house hire.
To Augment an Existing Financial Team
Your organization may already be in place, but perhaps the books got a little out-of-control during growth or transition. An outsourced controller may come in on a project-basis to help clean up your books so your team can better manage them moving forward. This service may be used in conjunction with an outsourced CFO who may help put financial systems in place and train employees in more efficient accounting practices.
To Prepare for a Transaction
An outsourced controller is often pulled into an organization to help prepare for a transaction such as raising capital, a merger or acquisition, or sale. In this case, an organization may not want a full-time hire when the projection of the business is dependent on the outcome of the transaction. The organization may also want to avoid adding another salaried employee to the roster prior to transaction. Or the organization may have their financial bases covered in everyday practices and simply need a control to help with the transaction itself.
To Support an Outsourced CFO
While some financial challenges can be resolved by simply cleaning up books or providing accurate reporting, many also need the expertise of a strategic CFO. An outsourced CFO and controller are a powerhouse duo. The CFO looks into the future and strategizes the most effective and beneficial trail ahead, while the controller provides the historical data and reporting so the CFO has the most up-to-date and accurate information with which to strategize.
It’s a Shorter Hiring Process and Comes with More Assurance than an In-House Hire
A professional outsourced controller organization has already vetted each controller on staff. Since information is such an important part of any organization’s daily processes, the outsourced controller organization is selective about the controllers they keep on staff. When you hire an outsourced controller, you don’t have to post to job boards, filter through resumes, or hold multiple interviews. Instead, the outsourced controller organization will get a feel for your needs and offer a solution they feel best fits your organization.
It’s Typically Less Expensive than Hiring an In-House Controller
A W-2 employee means full-time salary, benefits, bonuses, and raises. When you hire an outsourced controller, however, you’re only paying for the work you need completed. You’re also maximizing the expertise you’re getting per dollar.
How do I Hire an Outsourced Controller?
Organizations hiring an outsourced controller typically prefer to go through an established organization as opposed to hiring a freelance controller. Hiring a freelance controller can be as frustrating and time-consuming as head hunting for a full-time salaried employee. A freelance controller is also less likely to be as well vetted as a controller within an established outsourced financial services organization. Lastly, if for some reason your company doesn’t pair well with the controller selected by your outsourced financial services organization, they can easily replace the controller, whereas with freelancing you’d be back to square one.
At Preferred CFO, we have a number of outsourced controllers on staff and ready to help you in your financial data management and reporting. Contact us for a quote on outsourced controller services.
About the Author
Jerry Vance is the founder and managing partner of Preferred CFO. With over 16 years of experience providing CFO consulting services to over 300 organizations, and 30 years in the financial industry, Jerry is one of the most experienced outsourced CFOs in the United States.
You may also be interested in...
Cost analysis and price analysis are two important procedures that are used by businesses to calculate the true cost of a product or service and determine the best sales price. By understanding and correctly utilizing these processes, businesses can make informed...
Before starting a new business—and periodically thereafter—it is important for company executives to carry out a market analysis, also called a market evaluation. Most entrepreneurs conducted a market analysis (to the best of their abilities) when they were developing...
A fractional CFO is an experienced CFO who provides services for organizations in a part-time, retainer, or contract arrangement. This offers a company the experience and expertise of a high-end CFO without the in-house cost—salary, benefits, and bonuses—of a...
Generally Accepted Accounting Priciples (GAAP) Financial reporting is an important part of business that communicates the financial performance and results of a company. It records and presents information about the company’s financial position, revenues, expenses,...
The end of the fiscal year can be highly stressful for financial officers and corporate executives. The year-end closing procedure is time-consuming and sometimes brings unpleasant surprises. Particularly in times of economic downturn and short staffing, year-end...
The wise business owner will “know what they don’t know,” and will seek the appropriate experts such as financial advisors to fill those gaps.
If Your Company Doesn't Have a Financial Forecast, You're Wasting Time and Money Every company has goals. Where do you want your organization to be 5 years from now? 10 years? Most even have a general idea of the benchmarks you need to hit to get there—"By increasing...
Whether implementing a new software system, adding office space, acquiring another company, or any other substantial investment, companies want to know how long it will take to recoup the money they spend on major purchases. The way to determine this is by calculating...
Finding funding for your business is a process that takes a lot of time and effort, especially during the startup phase. Many entrepreneurs fail in their first attempts at fundraising because they are poorly prepared. Others get themselves into trouble by choosing the...
In these days of economic challenges and changes, many companies struggle with uncertainty about the future, seeking tools and resources to best position their businesses for financial success. Often it can be beneficial to bring in a financial advisor who has...
What is a Cap Table? Capitalization tables, commonly called “cap tables,” are highly useful spreadsheets maintained by companies that have multiple owners or investors. Cap tables are especially important for private companies at startup and in the early stages of the...
Many companies experience times when they find their accounting departments short on staff or short on expertise. Sometimes emergencies and financial needs arise that are beyond the capability of their financial personnel to address. This is particularly true in times...