Business owners: you can make your Controller a contributor to the success of your business

During my consultations with business leaders, I am often struck by the restrictions they have placed on their Controllers because of management’s limited expectations of this finance role. For this purpose, I am using the title Controller generically, to reflect any role that is the head of the Accounting department, whatever title and other responsibilities that person has.

If the owner’s expectations of the Controller are limited to a narrow accounting role then the incumbent will likely lean towards fulfilling only those expectations. However, the role can and should be expanded to include a wider financial contribution to the success and profitability of the business.

Engage with your Controller

To ensure that the following aspects of your business are in place:

1. Maintain cash flow forecasts for the short-term (often two to three months) and long-term (the balance of the current fiscal year as well as the following one). We all know that profit and cash flow are not the same, so it is critical to anticipate those crunches well in advance.
2. Prepare and maintain a budget which includes the earnings, balance sheets and cash flow forecasts at a level that includes a detailed review of the expected operations of the business in the fiscal year.
3. Attend regular meetings with executive management to review the financial statements and collaboratively make necessary changes to the business operations based on issues identified by the review. Ensure that this includes poor results to stop the negative effect and good news so that you can consider how to benefit from the knowledge in the future.
4. Coach executive management on the financial repercussions of operational decisions and occurrences. For example, I often encounter managers who are not aware of the impact on gross margins when a discount is given. This can either negatively affect gross profit on a sale or positively increase sales.
5. Regularly review the gross margin of each product or service. This will often lead to revised rationalization of the product range, what products to focus on and their selling prices.

Work with your Controller to determine which of these issues are relevant to your business. Coach the Controller to start working on a few of these areas at a time. If you have a resistant Controller who feels that there is insufficient time for these tasks, you can help encourage an evaluation of their time management coupled with a list of tasks that could be delegated. In some cases, this exercise may prove that the business needs to employ someone to take on the less complicated tasks to allow the inclusion of the important tasks that a Controller has trained for. Delegating, while not losing control, is an art and skill, that is not easy.

More controller contribution ideas

There are other great ideas that I can provide to increase your Controller’s contribution to the success of your business. Please complete the form on the right side of the page and insert “MORE CONTROLLER IDEAS” into the comments section and submit the form – I will provide you with more ideas.

Find more ideas for improving your business by visiting our blog archives page.

Article by: James Phillipson