The Controller | CFO’s Role in your Organization

Written by the Controller | CFO Advisor Team

Businesses of all shapes and sizes need some level of accounting support.  The typical scenario for providing this support to a business is a combination of an internal staff and services provided by an outside public accounting firm.  The role of these two participants is different as are the skills needed to complete the assigned tasks.  For the continued success of a business it is important for the management/owner to continually evaluate their accounting needs and make sure the selected provider(s) are accomplishing the goals of the business (“getting the job done”).  In determining the level of services needed one of the questions to be asked is, does my business require a controller and/or CFO?  Before this question can be answered it is important to understand the expectations of a controller and/or CFO.  What can and should they bring to the business to be able to contribute to its success?  

The Controller|CFO does not just “count beans”.  In addition to being proficient in gathering, organizing and preparing information, they are a key member of your executive team.  In this role, the Controller|CFO will provide information to help determine which processes, clients and products to focus on to maximize profitability and growth.

To some, accounting and financial statements are like a foreign language.  It is important to have someone help the business owner understand financial results by explaining them to him in a “plain” language.  Ratios and terms like EBITDA have meanings to investors and banks but the business owner may not be able to interpret the data without a proper explanation.  The same top line from month to month could result in a different bottom line.   Why?  It could be productivity, price erosion or other factors.  This is where the Controller|CFO comes in. 

The Controller|CFO helps the business owner understand the variances within the operating results.  They develop metrics to help monitor the performance health of the company.  Basic financial statements may not be the best measure.  The Controller|CFO helps the business owner understand what drives profitability.  Customer profitability, product and customer mix, material costs and employee productivity are some of the major factors that could be the source of fluctuations in the company’s performance.  The Controller|CFO provides the necessary tools to help the business owner analyze individual components appropriately.  Believe it or not, sometimes removing your largest client could result in more bottom line dollars.

In many industries, the sell price is dictated by the external marketplace.  The Controller|CFO helps the business drive the waste out by improving processes finding ways to cut costs and creating efficiencies.  He should be proactive, work closely with the business owner and support the entire company.  In time, they will become a trusted business partner.  

 Additional expectations and major roles businesses should receive from their Controller|CFO include:

• Be the internal financial consultant
• Ensure the control system works
• Inform the business owner on how the company is doing financially
• Keep interested third parties such as banks supplied with adequate information
• Add value by making overhead functions cost effective and fully supportive
• Provide insight and suggest courses of action
• They should function without any other agenda or bias other than the success of the company

The size of a company does not preclude the need for the Controller|CFO advisor.  An alternative to hiring or acquiring these services from internal staff is to outsource to a professional services organization.  This external source can add value by providing the knowledge of a former Controller|CFO to assist the company on an as needed basis for your business.  The advantage to the company is that they have at their disposal a well-trained qualified Controller|CFO that has a varied degree of experience at a fraction of the cost of a full time staff person.         

The BIK Controller|CFO Advisors:

Tony Battaglia
Tim Beck
Al Knox
Larry Schmitt

Together we can perform a variety of accounting and financial services to help your business run more efficiently and economically.  Our objective will be to improve your bottom line through better processes and procedures. Contact us today at cfoservices@bikcpa.com or call 847-281-3209. 

Visit our web-site at www.bikcfoservices.com.