Accounting Skills of your CFO/Controller

May 03, 2013

Serious about growth? You need to be serious about your financial leadership.

In the world of growing businesses, there may be nothing more commonly overlooked than financial leadership. Any company that is serious about growth needs to take a close look at its financial leaders. Behind the most successful owners, you will find financial leaders making it all possible. But many business owners feel confused when identifying the role of their top financial person or what qualifications they should be looking for when hiring. 

At KSJG, we serve companies that range anywhere in size from annual revenues of $20 million up to and above the billion dollar range. Almost always, these companies have a Controller or a CFO — or both. There is no set rule on when you need a Controller vs. a CFO vs. a duo. But we're here to help you figure it out, because it greatly impacts your company's success. Both a Controller and CFO help guide you financially and give you important accounting information that you must have. But a Controller and a CFO provide different services. An analysis needs to be done to determine whether your company needs a Controller, a CFO, or one of each.

Let's compare your company to a truck. If you are trying to go up a hill with a large heavy load in the back, you are not going to make it to the top of the hill if you don't have the right engine size and horsepower. It's the same with your company. You're not going to get where you want to go if you need a higher level of leadership support in the accounting and financial realm. It may be time for an overhaul.

Controllers: Their role is mostly accounting and they spend most of their time in the development of reports. Controllers roll up financial statements from source transactions and provide analysis to business owners — explaining what's in the statement, making sure the numbers are supported, doing some auditing, and looking at your agings and reconciliation schedules to make sure they agree with your balance sheet numbers. Most Controllers have the skill-sets to develop the historical financial data. Some of the more experienced Controllers will also take on the responsibility of Internal Controls implementation.

CFOs: A CFO is higher level than a Controller. They are usually an officer of the company. The experienced CFO will have the skill-sets and expertise to manage Internal Controls, forecasting, evaluation of financial feasibility of strategies, evaluating metrics established by the owners, and evaluation of possible business deals. CFOs spend less time prepping financial data and more time using the data to develop new strategies for your company and assisting in strategy implementation. Their role extends far beyond the accounting department and they could even be a participant in business decisions. They often take information a Controller gives them and will provide their own deeper analysis — they can even create for owners a financial dashboard that includes key financial and operating indicators. These dashboards can give you the information you need at a quick and easy glance.

The CFO can provide budgets and cash flow projections that help determine needs to help owners make decisions now to plan for the future. CFOs can even assist in looking at potential acquisitions an owner may be considering. CFOs interface with banks, insurance companies, and law firms on behalf of the company. They can negotiate contracts and/or provide analysis of those contracts to the owners.

There's no magic formula 
There's nothing cut and dry as to making a decision of who you need, but there are definitely indicators. For smaller companies, only having a Controller without a CFO may be enough. But it also depends on how much time owners have to devote to being hands-on with the financials. As your company grows, you need to adjust who is your financial leader compared to the size and complexity of your company. It's just a matter of how much horsepower your company needs to run optimally — and this will evolve over time. You may not need a CFO at this very moment, but in the next year or two you may need more financial horsepower for your organization to get where you want to go.

We can help 
At KSJG, we have worked with all sizes of companies and have helped assess their financial leadership needs. And it is inevitable that when organizations start to grow, their needs change — meaning they need to enhance their financial leadership. As a CPA firm, we give guidance, information, and advice to help owners do what is best for their business.

If you as an owner are not given enough financial information, you don't have a clear picture — you are blinded in a sense. If you're blinded, you're going to have trouble getting where you want to be. It's dangerous to drive your company blindfolded. And that's where we step in and advise owners. We actually assess the abilities of financial and accounting staff. We will let you know if you need more horsepower.

Finding the right fit 
We can help you find the right person at the right time with the right skills who is a good fit for your business. We are always our clients' sounding board. And because of our close connection with each of our clients, we feel highly capable of finding people who are the best fit. We take into account where you're at and where you want to go.

Maybe you need a person at a higher level, maybe you need more accounting staff, or maybe you need a CFO. We can and often do help companies find and recruit a new person for the position with the right level of experience for your company needs. For some companies, we have even acted as a temporary CFO until we find the right person to fill the role with the skill-sets your company needs, as well as someone who can fit in with your company's culture. It's about finding the right person with the right ability — someone who is truly the perfect fit. That's really important. A placement firm can find you an individual, but they may not always be able to find you someone based on your culture. We can do that.

For an organization to achieve its goals, it requires careful financial planning and extraordinary execution. Neither is even remotely possible without highly capable financial leadership. As always — we're here for you.

The information contained herein is for general information only and based on authorities that are subject to change. It is not intended and should not be construed as legal, accounting or tax advice. Your individual circumstances may vary from any examples provided and there is no guarantee that any particular tax strategy or exemption will be applicable to you. Contact KSJG or other tax professionals prior to taking any action based upon this information.

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