What is an Outsourced Financial Controller?

An outsourced financial controller is a financial expert who helps keep your books up-to-date. They also provide financial reporting and information in a timely manner, and provide outsourced CFO expertise where companies are in need.

Controllers can be in-house or outsourced. If the financial 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:

• Accounting
• Record-keeping
• Managing information technologies
• Financial & regulatory compliance
• Payroll
• 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 or fractional 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 financial 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 free quote on outsourced controller services.

About the Author

Tom Barrett is a skilled CFO with extensive experience. His financial expertise is key to helping companies with strategic financial planning, data analysis, risk assessment, budgeting, forecasting, cash flow management, and much more.

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