Are you the bookkeeper, controller and CFO of your company?
Here’s a checklist of your main responsibilities … And how to get them off your plate
In one of our most recent posts, we discussed ways to prevent employee theft or fraud. One of those ways involved separating the duties when it comes to your financial processes.
And one of the ways to do that is having a controller, as well as a bookkeeper and a CPA. Those last two may sound redundant, but we are familiar with the differences between a bookkeeper and CPA. Having both is very good for your company.
Why do you need a controller, though? Well, they can help prevent errors, fraud, security breaches, and more. Let’s take a look at the role and responsibilities of a controller/CFO versus an accountant or a bookkeeper.
What do bookkeepers do?
A bookkeeper performs day-to-day financial record keeping. They may provide standard monthly financial reports like income statements, balance sheets, or a statement of cash flows. In addition, they may perform duties such as paying bills, sending invoices and recording Accounts Payable and Accounts Receivable entries.
Tip: using bookkeeping automation will reduce the need for data entry and decrease the chance of errors.
So, why do you need a controller AND a bookkeeper?
A controller is the individual responsible for all accounting-related activities. Their job starts after the data has been entered into your bookkeeping software. Here are some of their duties. Which of these do you perform?
☑️Review bookkeeping entries and accounts
☑️Reconcile accounts and make any entry adjustments (remember, your bookkeeper should not be making entry adjustments)
☑️Complete the month-end closing process of your books
☑️Deliver accurate and timely financial reports
☑️Help ensure compliance with laws and regulations
A number one priority of a controller is ensuring the accuracy of financial reporting. This includes internal controls and employee theft prevention. Additionally. they can prepare more in-depth, complex financial reports. He or she may also assist with the preparation of operating budgets, cash flow management, and payroll. A controller ultimately provides better support for your CPA, which will also save you time and money.
Important to note: controller functions vary across companies. They depend on the size and complexity of the business, as well as the industry. Sometimes those functions and duties will overlap with your bookkeeper/accountant*, as well as your CFO.
*Note: in some states, depending on regulations, bookkeepers are considered accountants*
What about a Chief Financial Officer?
If you are the founder/owner of a small business, you are likely also serving as the CFO. You oversee the overall financial management of your business. This can be broken down into 4 core functions.
☑️Analyze and review the financial reports
☑️Ensure the reliability of the financial data
☑️Develop financial forecasts and projections based on that data
☑️Make strategic business decisions based on financial forecasts and projections, KPIs, etc.
I have a question for you. Are you a numbers person or an ideas person? When you look at financial data, what do you see? Do you see only the numbers or do you see the stories behind the numbers?
A CFO interprets those numbers and decides which metrics matter most. They chose the key performance indicators as well as lagging financial indicators. Looking at the data, they decide what actions will have a positive impact on your company’s performance. A CFO helps with your business’s financial strategy, such as pricing, long-term projections and strategy refinement. This helps you make informed strategic business decisions regarding not only operations but also capitalization, debt financing, investors, etc.
How to get those bookkeeping, controller and/or CFO duties off your table
Looking at all of these duties can be overwhelming to say in the least. Especially if you are trying to do it all on your own. Maybe these duties are eating up time that you could be spending on other, equally important, responsibilities. It doesn’t take a business degree to understand the responsibilities that come with running a company.
We bet you didn’t start your business to slave over books and finances. (Though we aren’t judging if you did.) Those responsibilities are inevitable regardless of what kind of business you run. It comes with the territory. There is hope, though. You don’t have to deal with the weight of those responsibilities alone.
At Hire Effect, we provide customized, outsourced solutions for bookkeeping and payroll services that go beyond compliance. In addition, we offer Controller and CFO services as well as franchise bookkeeping services, recruiting and talent acquisition, HR & talent management. We can do as little or as much as you need and want. Our ultimate goal is to help your business grow by getting you out of the back office. We give you the freedom to focus on customer-facing, revenue generating activities and strategic business growth. Contact us today.