While the sea change of COVID-19 has affected nearly all sectors of the economy, it has been especially impactful to small and medium-sized businesses: According to a survey from Goldman Sachs 10,000 Small Businesses Program, nearly 2/3rds of small businesses have responded to the pandemic by pivoting to new revenue sources or adapting to different business models.
The role of accounting professionals in small businesses is changing in turn. The role of the controller, specifically, has been significantly altered over the past year. COVID challenges continue to force controllers to adapt their agendas and assume new responsibilities.
In this article, we will explain how the traditional responsibilities of a controller have changed as a result of the pandemic, and discuss in detail how consulting with a controller can help small businesses adapt to the post-pandemic landscape.
What is a controller, and how is the role evolving?
A controller can be thought of as a business’ head accountant and the leader of its accounting department. Controllers report directly to a business’ CFO (and CEO absent a CFO). Whereas a CFO is more concerned with broad financial strategy, a controller’s responsibilities traditionally include more specific accounting tasks, like preparing budgets, producing reports and overseeing payroll.
In response to the pandemic, though, the role of the controller has expanded, and now involves many of the larger strategic responsibilities that have traditionally fallen to CFOs. In small businesses especially, the controller and CFO roles are increasingly combined.
Ways that a controller can help small businesses
So, what new duties do modern controllers need to assume, and how can a controller help your small business? While this isn’t an exhaustive list, here are 3 important advantages a consultation with a outsourced controller option can offer:
Real time financial reporting and data analysis. The COVD-19 pandemic forced businesses to respond to rapidly changing market and financial conditions, and controllers needed to become equally adaptable when understanding and reporting these changes. Modern controllers have assumed much more responsibility for reporting financial data in real time, and for using that data to predict changing financial conditions.
Using current data to forecast expected scenarios for small business CEOs is critical. The success of the 2/3rds of small business owners that have brought on revenue streams or altered their business is often driven by the information available at the time of this decision. Controllers have become critical of accumulating, reporting, and interpreting information for business leadership.
Improving capital allocation. Capital allocation, or the ways in which a business uses its resources to pursue growth opportunities, is a critical part of financial strategy. And while a CFO or virtual CFO is often the person who determines capital allocation strategy, the modern controller is in the perfect position to evaluate how effective that strategy is: A controller will use metrics and data analysis to independently and unbiasedly evaluate how a business’ capital allocation is working out. Small business strategy is important, especially where growth is concerned, and a skilled controller will ensure that a business’ strategy is sound.
Overseeing financial transformation. In short, the term “financial transformation” refers to how businesses modernize their finances, whether by automating processes and adopting new technologies or reevaluating the productivity of their workforce. A controller is the perfect fit for overseeing a financial transformation, because they are skilled at both project management and interpreting financial data.
A small business owner might want to consult with a virtual controller in order to ensure that a transition to new inventory management software goes smoothly, for example, or to rethink how a shift toward a remote workforce will affect productivity.
How Krieger Analytics can help
So, now that you know how a controller would benefit your business, you might be wondering if you have the means to hire one. And rightfully so: A full-time accounting executive can demand a 6 figure salary, and most small businesses don’t have 40 hours of high-level accounting work to be done every week. Consider, instead, outsourcing the services of a virtual controller. Even 10 hours worth of consultation with a virtual controller in a month can mean tangible benefits for your business’ financial health.
Krieger Analytics specializes in outsourcing accounting services for small businesses, from bookkeeping to virtual CFO and controller consultations, and our background in entrapuernship and finance means we know what running a business entails. Our goal is to meet your small business accounting needs without burdening you with the costs of a full-time accounting staff. And, we understand your position as a small business owner, because we have experience running businesses ourselves.
Have questions about anything discussed in this article, or interested in what valuable insights a CFO and former franchisor has for your business? Conversations are free, so don’t hesitate to reach out at [email protected], and let us explain how our services could be the right fit for you.