Knowledge of small business accounting is necessary to become a controller, who oversees accounting and bookkeeping. It’s a job that 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 to know 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 activity 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 is involved with strategic planning. At a small firm he or she reports directly to the CEO or President. So the role varies depending on the company size and its structure.

Ideally, the accountant has experience in negotiating lease agreements and other types of B2B contracts. He or she should also have experience in 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 called “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 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. The job may further involve interacting with employees about their benefits if the firm has no human resources department. 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 key part of the job is to develop bookkeeping policies. Once a startup begins earning regular income, it’s essential to keep accurate records of all transactions. This goal is achieved by setting rules and procedures that define consistency in bookkeeping.

Accounting Responsibilities

One of the main responsibilities of a Carmel accountant is to find ways to save money through small business accounting. The accounting must be conducted with a high precision of accuracy when it comes to 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 keeps careful track of labor costs and devotes time to making sure bookkeeping is up-to-date. He or she must followup on all invoices and receivables and make sure inventory is consistent with orders to prevent theft, loss and waste. They must also make financial projections, which helps guide an organization in its spending and policy-making.

As for a non-profit organization, it’s still important to earn revenue to pay for costs and developing resources. Someone experienced with tax planning needs to oversee the finances with the understanding that a non-profit’s annual tax filings are public record. That means the organization must be selective on who it hires for this position, which often carries the title of controller. This experience is important 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 company history and is used as 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 an entrepreneur launching a new small firm is to hire an experienced small business accounting professional. The reason a high percentage of startups fail after the first year is they run out of cash or run up debt. Either way, a company can avoid collapse with the right person in charge of counting 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 obviously is in no position to hire employees. But 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 other places it might be more focused on certain areas of accounting. For deeper insights on 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.