Three Reasons Your Business Needs a Financial Controller

July 30, 2018

Small and medium-sized business owners in Canada have a lot on their plates. Depending on the size and structure of their organization, their responsibilities can include hiring and managing staff, developing client relationships, monitoring the company's growth strategy, and ensuring the business remains profitable — to say nothing of managing the day-to-day operations.

One of the biggest challenges for many business owners is finding the right level of finance and accounting support. Many fall into the trap of thinking all types of finance professionals are the same. They may hire a bookkeeper and expect them to carry out complex accounting policies or create forecasting models, for example, or hire someone overqualified, such as a chief financial officer (CFO), to perform data entry and compliance responsibilities. To properly execute a financial strategy and drive the success of a company, what business owners need is a financial controller.

What is a financial controller?

A financial controller — also known as a finance manager, accounting manager, senior controller, or director of finance — is a must-have for any business that requires financial management. While a CFO is responsible for overall strategy, a financial controller takes the lead on the crucial activities of financial reporting, compliance, and complex accounting policies related to accruals, deferrals, and receivables.

Business owners should consider engaging a financial controller for the following benefits:

1. A financial controller clarifies your financial reporting and keeps your business on track.

Where financial structures and procedures are more complex, a financial controller can provide insight and clarity on business operations and performance. Monthly reconciliations are not enough to provide an accurate picture of your business and the risk for financial misstatements can be high. A business that is generating millions of dollars in revenue could, in actual fact, be losing money in one or more areas. By the time a business owner realizes the problem, it may already be too late to change course, and the effects can be long-lasting.

A qualified controller can implement appropriate matching principles and revenue recognition, analyze and report on established KPIs, and ensure that monthly and yearly financials align. They provide business owners with timely, high-value information to help the organization thrive.

2. A financial controller reduces your risk of fraud.

Fraud has a serious impact on business in Canada, to the tune of $30.4 million in losses last year, according to the Canadian Anti-Fraud Centre. While business owners are ultimately responsible for due diligence and management, a financial controller mitigates risk through the segregation of duties. Reporting and auditing functions are managed by the controller, not by the same individuals who have authorization or spending powers.

3. A financial controller can ensure regulatory compliance.

Tax and financial regulations in Canada can be complicated and overwhelming, and many business owners lack the technical knowledge required to ensure they are compliant. A central component of a financial controller's role is to maintain compliance with both provincial and federal regulations, as well as meet requirements set by financial institutions. This includes, but is not limited to, responding to Canada Revenue Agency requests, meeting banking reporting requirements, and preparing tax filings. While businesses may think they can manage without this type of support, the reality is that noncompliance penalties can be devastating to your bottom line.

How can business owners find the right support?

Finding a qualified financial controller can be particularly challenging for small and medium-sized businesses. The role requires a high degree of technical knowledge and experience, and the talent market is competitive. Many organizations attempt to go without a financial controller, or they assign responsibilities to a staff member who lacks the necessary background, which in turn increases the risk of data inaccuracy and other errors.

Business owners need to engage the services of a trained and professionally certified financial controller who brings the depth of experience needed to solve problems efficiently and quickly.

BDO's Accounting Advisory service team can provide the right level of accounting support for your company's needs, including helping you to hire a full-time controller through our recruiting services, or engage a part-time controller through our outsourced services. Through our integrated approach, we work to fully understand your business and help your organization grow. Contact us to request more information.

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