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Pros and Cons of Outsourcing your Business's Controller Services

Posted by Stephen King
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A controller is a vital part of the accounting department for every business. They head up the accounting department and are responsible for supervising bookkeepers and accountants, producing month-end close reports and helping guide CEOs to make critical business decisions.

Download The Smart Back Office  The QuickBooks Centric Financial Tech StackWhile some companies see drawbacks to using an outsourced controller, there are also benefits that a company can only get when using an outsourced service. Outsourcing the controller function has become a new way CEOs can benefit by cutting costs, gaining expertise and making confident business decisions.

To help your company make the best decision possible, we decided to explore the pros and cons of outsourcing your business’s controller services.

Problems Businesses Have with Outsourcing Their Controller Function 

Outsourced controller services don’t fit the exact needs of all businesses. Sometimes CEOs and owners have hesitations when moving their controller service out of office. Some areas that prevent CEOs and owners from outsourcing are:

  •      Loss of Control
  •      Communication Issues
  •      Don’t Know the Business
  •      Different Locations or Time Zones

While these are all valid concerns, the benefits of outsourcing the controller function for many businesses can outweigh potential problems. Most outsourced services know CEOs might have these apprehensions and work to make sure these issues are minimized.

For example, outsourced service providers know that worries about communication issues are one of the top deal breakers in their industry. Many have taken steps to alleviate the problem by having dedicated phone lines direct to employees, video meetings and instant messaging. Many businesses have received even better reporting from an outsourced controller who operates out of a different location. It might not be ideal for all businesses, but some see great reward with their outsourced controller. 

Knowledge about the business is something that controllers learn while providing reports for your business. At first it can be difficult if they don't have a strong grasp on how your inventory process works or the daily interactions with clients, however, the way the weekly and monthly processing and reporting is set up can go a long way to alleviate many of the potential downsides of not knowing the business and a lack of control.

Benefits of Outsourcing Your Controller Services

Outsourced controller services allow companies to benefit from things they wouldn’t get with an in-house controller. CEOs won’t spend precious time dealing with staffing pains, supervising work and documenting exact guidelines a controller should follow. Below are some benefits your company can get when they outsource their controller function.

Staffing: When using an outsourced controller your company will never have a single point of failure. If your in-house controller were to get sick, leave for vacation or quit, do you have a system set in place to operate seamlessly in their absence? We hope you do, but if you don’t, your business can run into problems when it comes to the month-end close, supervising the accountant and bookkeepers work, and picking up the controller’s workload.

When using an outsourced controller, there is a system set in place where a different controller can step in and take over their role without any problems if they were to be absent. Your company also won’t need to go through the process of hiring and training employees. The time spent when searching for the ideal candidate that fits all requirements for the position adds up in costs. To learn more about the price of outsourcing controller services check out our blog on cost.

Expertise on Demand: A good controller should have multiple years of experience working for other companies and an accounting degree. There are people with the title of controller for companies who have not graduated from college and are very knowledgeable, however, we find that controllers with vast experience and a degree have the most understanding of the reports that are expected of the position.

In-house controllers should have experience and understanding of the best practices, but their company might not require training on a regular basis, which can lead to below par industry knowledge. Outsourced controllers are trained to a set standard and are immersed in new practices regularly. They will be able to provide expert knowledge and help guide decisions that will help your business grow and make more money.

Month-End Close: The reports you get at the end of the month show your business’s overall standing. They are important because a CEO can see where the business is doing well and where it isn’t. Depending on the needs of a business, the month-end reports will look different. A standard month-end close typically consists of an income statement, balance sheet, accounts payable and receivable and a statement of cash flows.

If your business requires more in-depth reporting, the package could include things like budget vs. actual and custom reports showing profitability by customer, jobs, products or services, marketing spend, employee, department, etc. Those “management” reports allow the CEO to get actionable financial intelligence that helps make data driven decisions such as:

  •      “Am I pricing my jobs right?”
  •      “Which products or services are most profitable and should be the focus
          of our sales and marketing dollars?  “
  •      “Which staff contribute the most to our profitability and how do I find
           more people like that?”

There is no limit to the amount of reports your business might need or want. A benefit when using an outsourced controller is they know how to produce any report your business could need. If they weren’t familiar with a specific report, they have an entire team of other employees who have probably had experience producing that report. Outsourced controllers have the knowledge to produce accurate, timely and meaningful month-end reports.

Procedures/Policies: When controllers have a procedures manual or a policy to follow, it makes their job easier when producing accurate month-end close reports. To get these reports at month end, many details must be recorded throughout the month.

Outsourced controllers oversee staff to make sure that policies and procedures are followed to provide compliance and a quality month-end close. Step by step procedures that are documented in a month-end checklist to ensure that nothing is missed during the process. Procedures also allow for outsourced controllers to easily step in and take someone’s place if they are sick or out of the office.

Is Your Business Ready to Outsource Their Controller?  

It might not make sense for all businesses to outsource their controller function, but it can provide certain businesses with expertise they might not currently have and can’t afford. If you aren’t receiving timely month-end reports, or you have to spend time on accounting instead of growing your business, outsourcing may be a solution for your business.

GrowthForce goes beyond just bookkeeping and accounting. Our controller services provide critical oversight and account management to ensure that the right policies, procedures and systems are implemented and timely accurate financial statements are produced. We follow a disciplined month end closing process, which ensures the management reports reflect the true monthly economic results of the company.

The key benefits our controller service provides are financial and management reports that help you make decisions that will help you drive performance and profitability. Get timely accurate reports you can trust that help you take action. Let us help you run your business with total confidence backed by accurate, up-to-date financial reporting you can depend on.

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