In the debate of controller vs accountant, understanding their roles is key. An accountant focuses on maintaining accurate financial records and ensuring tax compliance, while a controller oversees the financial department, establishing policies and providing strategic insights. Both positions are essential for achieving business goals.
Even though your business may be rapidly expanding, it can be challenging to structure its financial infrastructure. You'll often have a dilemma over who to hire and who to hold off on for a while. Should you hire a financial controller or an accountant? Should you hire both at the same time or hire one to head the whole financial department?
The truth is, you'll be better off with both of them in your corner. Still, many business leaders find it hard to distinguish between a controller and an accountant. Controllers and accountants have a tight relationship. However, the fundamental distinction between the two professions is the amount of supervision controllers give to the organizations in which they work.
In this article, we will help you understand the roles of a controller and an accountant, and how each can help you achieve the goals you've set for your business. Let's dive in.
What is an Accountant?
Compared to controllers, accountants handle easier accounting chores, including:
- Financial Record-Keeping: Accountants maintain meticulous records of financial transactions to determine net profit or loss and assess the business's financial standing.
- Compliance and Planning: They ensure books of accounts comply with accounting principles and legal requirements, aiding in future business planning.
- Financial Accounting Tasks: Accountants examine financial records, compare bank statements, and compute tax bills, providing precise data on financial status, liquidity, and cash flows while ensuring tax compliance.
Ultimately, this will give you precise quantitative data about your company's financial status, liquidity, and cash flows while ensuring that the company complies with all applicable tax laws.
What is a Controller?
Controllers are responsible for various tasks that all operate under the scope of supervising the accounting department.
- Supervision and Policy Establishment: Controllers supervise the accounting department, establish accounting policies, and ensure processes run smoothly, regardless of business size.
- Tax Compliance and Reporting: They ensure tax compliance by managing external reporting requirements, coordinating with audit teams, and communicating findings to executives.
- Financial Reporting and Data Analytics: Controllers create financial statements, stay updated on reporting standards, and use data analytics to provide strategic insights and financial forecasts.
Ultimately, controllers provide strategic oversight and ensure that financial operations align with company goals, offering insights that support growth and compliance with financial regulations.
Hiring Based on Your Business Goals
You should be happy when you find yourself debating between hiring an accountant or a controller. Why? It signifies your company has expanded to a new revenue level, and you need to reevaluate how you're managing your finances. However, you must establish your goals before deciding if your company requires a controller or an accountant.
Quick answer: Hire an accountant for foundational financial tasks. A controller becomes essential as your business grows and requires comprehensive financial management.
Growth
When you find that your company's bookkeepers' abilities or available time cannot keep up with the growth, you'll know it's time to recruit a controller. By hiring a financial controller, your growing business can more easily complete complicated accounting operations, speed up bookkeeping, and enforce internal controls and corporate guidelines.
This is not meant to diminish the usefulness of bookkeepers, but financial controllers are better equipped than bookkeepers to undertake responsibilities like coordinating with external auditors and tax experts and preventing fraud. They also have the education, training, and experience to do so.
Revenue
When your company is making a profit, an accountant may assist you in managing your accounts and taxes to ensure your transactions are appropriately recorded. This way, it is simpler for stakeholders to comprehend your company's success.
On the other hand, if your business generates more than $5 million in annual revenue, you are prepared for and need the skills of a full-time controller. It makes sense to hire a full-time controller at this point in the business development so that they can manage your bookkeepers and accountants while reporting to the CEO.
Reporting Needs
Irrespective of income volume, most financial controllers are employed when a business needs to produce GAAP-compliant financial statements to satisfy bankers, investors, or, in the case of startups, private investors. Report types could include cost reports, inventory reports, budget versus actual numbers, etc. These reports are intended for internal users with company clearance or for company employees only.
So, Which Role Is Better?
While the duties of a Controller and an Accountant differ, both are concerned with using numbers to forward the objectives of your business. Both have advantages and depend on one another to succeed. It is crucial to know which position you can outsource or if you'll require it internally.
Adding a fractional team of 3 executives will assist you in covering all the financial areas of your company's operations. This will allow you to spend much less time administering payroll or reconciling finances and gaining the information you need to make future strategic decisions.
Find the Financial Support You Need With Dillon Business Advisors
At Dillon Business Advisors, we match businesses with a team of financial advisors who take on the roles of CFO, Controller, and Client Service Manager on a part-time basis that fits your business’s needs, budget, and goals. You can focus on your business’s operations and gain trusted financial partners. Contact us today to start a business analysis.
