When Should Your Start-up Hire a Financial Controller

Apr 16 2021 Financial Management

Every business decision made has a financial impact on your company. Whilst things like tracking revenue, staying on top of accounts payable and receivables, and administering payroll are essential to your business, non-financial transactions will undoubtedly also have an impact.

While it may have been easy for the business owner to manage these various tasks when they were first starting out, it becomes increasingly difficult as the business grows and this requirement distracts the owner from the vital revenue-generating activities founders are normally best to focus on.

‍So, how are you staying on top of your company’s finances today? What kind of financial management support should you expect in the business lifecycle?

If you’ve outgrown the DIY approach and feel the level of support you receive from your Bookkeeper and Compliance Accountants are not value adding, then it may be time to hire a Financial Controller for your business. Even a few hours a week or month can have a big and immediate impact and is a lot more affordable than waiting for a full-time role to develop.

When do you need a Financial Controller for your business?

Business owners will quickly come to realise that they can’t handle every part of their business on their own. Invariably, the part of the business they try to hold on to the longest, is finance. Don’t get us wrong — a founder should absolutely understand the in’s and out’s of their company’s finances.

What we’re talking about is the day-to-day management and execution of a business’ various financial needs. Eventually, this becomes unsustainable and a distraction from the founder’s core abilities and entrepreneurialism.

Who you need and when you need them depends on the circumstances of your business. If you’re experiencing rapid growth and expansion, trying to raise bank finance but can’t answer all their questions, or expanding your business to new locations, it may be time to consider assistance.

What is a Financial Controller (FC) responsible for?

FCs are responsible for financial management and regulatory compliance of a company, overseeing accounting operations and record-keeping. They may also be responsible for managing other business-wide initiatives, including IT, HR, insurance, VAT and income tax reporting, among others.

Overall, they have a full understanding and control over the day-to-day financial aspects of a business.

Some of the core job responsibilities of a Controller include the following:

Managing the company’s key financials

Keeping balanced books and filing your annual taxes is important regardless of the size of the company. But as you seek to grow your business, you’ll require a deeper understanding of your cash flow and business KPI’s and how better to manage and improve them. A good Financial Controller will naturally think about cash and other key metrics and will deploy measures to make the most of them as well as flagging and offering solutions to potential issues on the horizon.

Create financial reports and analysis

Another important role of the Controller is creating reports for the Managing Director and other management to review and leverage when making strategic business decisions. Controllers become part of the higher-level management team and, therefore, help direct the business towards achieving its goals. They’ll take on in-depth financial reporting, develop and track key performance indicators and make recommendations to those ends.

Manage financial staff and external relationships

Because a lot of their time is spent understanding the financial systems of the business and using that information to create better processes and plans for future growth, FCs won’t necessarily take the lead on responsibilities that typically fall under bookkeepers and accountants. They’ll manage the accounting department and those employees as well as being a key bridge and ‘interpreter’ of financial activity with key external stakeholders such as auditors, funders, tax authorities, customers and suppliers.‍

Outsourcing an FC

It is unlikely that any business will suddenly go from not needing an FC to needing a full-time FC the next day. By looking outside of the business for an outsourced Financial Controller, you can choose an individual who has learned best practices through experience and will devote and charge you only for the time required. They can look at your current processes, procedures, and streamline them to your benefit.

Using a freelancer or a financial management company to perform this role, will save you money if you do not have enough of a requirement for a full-time FC. Utilising a larger organisation to help with this role, will furthermore give you choice and back up in the event of unforeseen circumstances.

By using an outsourced individual, you will benefit from less: 

  • Need for space and other overheads
  • On cost (payroll taxes, pensions and holidays)
  • Recruitment fee
  • Paying for inefficient fixed hours
  • HR legislation and employment issues
  • Management supervision
  • Training

Benefits of hiring an EFM Financial Controller

Hiring a full-time, experienced in-house Financial Controller is expensive and you may not have a full-time need. Outsourcing provides you with access to a quality individual at a cost that is aligned to your business needs. Furthermore, you can choose the right individual to maximise performance, productivity and compliance at the correct level for your business and with a personality that fits well with the company style and culture.

Our Financial Controllers are not ‘just senior managers with accounting experience’. They have an eye for detail, managing routine and non-routine transactions, ensuring data is accurately recorded and presented, and that the client’s business has sufficient procedures and controls to effectively manage the financial risk facing the business.

By engaging a part time Financial Controller, you simply pay for support as and when it is required. This allows you to invest more of your funds in activities which will directly benefit your bottom line.

If you’re struggling to find a part-time Financial Controller for your business, EFM can help. Our team of experienced FC & FD EFM Experts are here to support your business.

To find out more around how EFMs tailored financial management services can benefit your company, get in touch. Contact us via?[email protected]?or call?01582 516300?to set up your free one-hour consultation.

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