Knowledge of small business accounting is necessary to become a controller who oversees accounting and bookkeeping. This job can be done by a sole proprietor, but once the company grows, the work can be delegated to an accounting expert. Here are essential facts about this diverse financial position, which differs from a regular accounting position because of its forward-thinking analytical approach.
Nature of Controllership
The job encompasses monitoring all the activities in the organization relevant to accounting. At a large corporation, controllership calls for a mid-level manager who reports to a CFO. In some places, this position is senior-level and involves strategic planning. At a small firm, they report directly to the CEO or President. So, the role varies depending on the company’s size and structure.
Ideally, the accountant has experience negotiating lease agreements and other types of B2B contracts. He or she should also have experience dealing with lending institutions, licensing agencies, and creditors. Learning the lexicon of accounting language is essential in dealing with partners and funding sources.
A similar title, “comptroller,” is given to accounting supervisors at governmental organizations. In some states, it’s an elected statewide position. This official is similar to a corporate CFO and oversees internal audit functions. In the business world, a comptroller is the chief audit executive.
Monitoring the cash flow of a company that earns thousands of dollars is a major financial responsibility for the head of accounting, who must also have experience in payroll processing. If the firm has no human resources department, the job may further involve interacting with employees about their benefits. Managing cash flow can be a daily task if the company earns substantial revenue. It takes someone with plenty of accounting experience to know at all times the amount of money the company has available in the bank for spending.
Another crucial part of the job is to develop bookkeeping policies. Once a startup begins earning regular income, keeping accurate records of all transactions is essential. This goal is achieved by setting rules and procedures defining bookkeeping consistency.
Accounting Responsibilities
A Carmel accountant’s primary responsibility is finding ways to save money through small business accounting. The accounting must be conducted with high precision and accuracy when tracking cash flow and expenses. The easiest way to stay organized is to use accounting software that integrates with other operational software, such as a customer relationship management platform.
The small business head of accounting carefully tracks labor costs and devotes time to ensuring up-to-date bookkeeping. He or she must follow up on all invoices and receivables and ensure inventory is consistent with orders to prevent theft, loss, and waste. They must also make financial projections, which help guide an organization in its spending and policy-making.
As for a non-profit organization, earning revenue to pay for costs and develop resources is still important. Someone experienced with tax planning needs to oversee the finances with the understanding that a non-profit’s annual tax filings are public records. That means the organization must be selective about who it hires for this position, which often carries the controller title. This experience is essential because failing to file taxes accurately can result in the organization losing its tax-exempt status.
One of the most critical parts of the job is generating quarterly and annual financial reports to reflect company earnings. This report becomes part of the company’s history and is a reference for the company’s financial health when applying for credit. Lenders will analyze net income, liabilities, and how well the firm manages expenses.
What Small Startups Should Know
A common major concern of entrepreneurs launching a new small firm is hiring an experienced small business accounting professional. A high percentage of startups fail after the first year because they run out of cash or accumulate debt. Either way, a company can avoid collapse by having the right person count the money.
Not every startup needs a financial chief, particularly companies that employ only a few people. A brand new company that plans to outsource to freelancers but has no money is in no position to hire employees. However, a well-funded firm with ten or more employees can benefit significantly from hiring an accounting expert.
Someone who wants to pursue a career in controllership should consider getting a Master’s in Business Administration (MBA) at a reputable college and learn the duties of senior accounting. Becoming a Certified Public Accountant (CPA) is also often a prerequisite.
Conclusion
A controller ultimately oversees accounting in various capacities, but the exact job description varies among companies. In some firms, it involves tedious work looking at numbers, while in others, it might be more focused on certain areas of accounting. For deeper insights into accounting, contact a Carmel accountant at Savage Accountancy and Valuation. We’ve been serving the region since 1983 and are ready to help bring quality accounting to your business.