Most businesses need a financial controller once they hit the $1M revenue mark.
Your startup could benefit from a financial controller’s expertise even with a team smaller than 10 people. A financial expert’s guidance becomes vital to accelerate growth, whether you run a bootstrapped or venture-backed company.
The perfect time to bring someone on board for financial controller responsibilities might be right after you secure $1M in funding. Your company’s need for a controller grows as you scale, and most businesses have brought one in-house by the time they reach $10M in annual revenue.[-5]
Many founders delay investing in financial expertise. They end up struggling with administrative tasks, delayed reports, and compliance requirements. These roadblocks can slow down your company’s progress at key growth stages.
This piece will show you clear indicators that signal your startup’s need for a financial controller. You’ll learn about their core responsibilities and how to choose the right person for your growth stage. Let’s take a closer look at building a strong financial foundation that matches your business goals!
What Does a Financial Controller Do?
A financial controller leads the accounting operations in an organization and ensures financial stability. This role is significant for startups that want sustainable growth and financial health, though many people misunderstand it.
Understanding the financial controller job duties
The financial controller job duties cover four primary areas, commonly referred to as the “Four Faces of Controllership“: stewardship, operator, catalyst, and strategy. A controller spends about 70% of their time on stewardship and operator functions. The remaining 30% goes to catalyst and strategy duties.
Financial controller’s main duties include:
- Managing the financial reporting process and ensuring accuracy of financial statements
- Overseeing budgeting, forecasting, and internal controls
- Ensuring compliance with financial regulations and tax requirements
- Supervising accounting staff and operations
- Analyzing financial data to support decision-making
- Safeguarding company assets through proper controls and procedures
Controllers “control” the company’s financial risk and reporting aspects. They ensure accurate preparation and delivery of financial statements to senior management.
How the role is different from a CFO
Both roles focus on financial management but serve distinct purposes. Financial controllers handle day-to-day accounting operations and internal reporting. CFOs take a broader, more strategic approach to the company’s financial health.
Controllers spend most of their time in a “heads-down” position. They work with historical data, maintain ledgers, analyze variances, and ensure accurate reporting. CFOs focus on external-facing responsibilities like investor relations, capital raising, and strategic planning.
Companies with revenues of approximately $60-85 million see more defined separation between these roles. The CFO takes ownership of external financial activities and the controller manages internal financial processes.
Why startups often overlook this role
Startups often wait to hire a financial controller until financial challenges become overwhelming. Founders handle financial tasks themselves or rely on bookkeepers in the beginning. They don’t realize the strategic value a controller brings.
Many startups see the controller’s role as purely administrative rather than strategic. Companies should hire a controller when they reach $8.5 million in revenue or need GAAP-compliant financial statements to satisfy investors or bankers.
This oversight can lead to financial strain, delayed reporting, and missed growth opportunities. Solid financial management becomes essential during rapid development and fundraising efforts.
Clear Signs Your Startup Needs a Financial Controller
Your startup needs dedicated financial expertise when it outgrows its current financial management setup. These signs will tell you it’s time to make that change.
You’re spending too much time on financial admin
Research shows 63% of entrepreneurs dedicate at least one full day each month to financial paperwork. This takes valuable time away from running the business. First-year startups face the biggest challenges – 60% struggle with taxes and 59% with accounting. Your business needs help when financial paperwork starts eating into your strategic planning time.
Your financial reports are always delayed or inaccurate
Bad financial reporting results in wrong business decisions, fines from regulators, and damage to your reputation. More business owners admit they don’t trust their numbers. Reports come in weeks late or have mistakes. Making decisions based on gut feeling instead of reliable data puts growing companies at risk.
You’re preparing for fundraising or due diligence
A financial controller will give you accurate, timely reports that meet all regulations – exactly what investors want to see. They help spot and reduce financial risks that could stop you from getting funding. Investors look closely at financial data, balance sheets, profit-loss statements and long-term projections.
Your accountant or CFO is overwhelmed
Your CFO needs to focus on strategy. Everything in their role suffers when they get buried in daily operations. The CFO should handle big-picture financial planning while a controller takes care of daily tasks and reporting.
You’re seeing cash flow issues or compliance risks
Many startups fail because of poor cash flow management, even with great products. As your business grows, so do compliance risks. Controllers play a vital part in setting up internal controls, following regulations, and managing financial risks.
Key Benefits of Hiring a Financial Controller
A skilled financial controller adds real value that helps your startup grow faster. Let’s get into the key benefits that make this role crucial for your business.
Improved financial reporting and accuracy
Financial controllers create precise financial statements that show your company’s true financial position. Their accuracy helps build investor trust—a key factor in getting funding. The systems they put in place ensure quick reporting, which helps management make decisions using current data instead of old information. Their knowledge of accounting standards reduces the risk of mistakes that could cause financial losses or legal issues.
Better budgeting and forecasting
Controllers team up with executives to create realistic budgets that match strategic goals. They can predict future outcomes using past data and market trends, which leads to smarter resource use. Their detailed analysis spots trends and ways to improve, so startups stay financially healthy and grow steadily.
Stronger internal controls and compliance
Controllers protect company assets by setting up strong internal controls and ethical financial practices. These controls help prevent fraud, catch accounting mistakes, and stop financial mismanagement. They make sure startups follow all financial rules and reporting requirements to avoid legal troubles and fines.
Support for investor relations and audits
Controllers prepare detailed financial reports that attract investors during fundraising. Yes, it is common for controllers to handle investor relations when there’s no CFO. They keep documents well-organized so startups can handle audits and due diligence smoothly. This preparation builds trust with potential investors and helps maintain long-term stability.
How to Hire the Right Financial Controller
Hiring the perfect financial controller needs you to think about several key factors. The right person can revolutionize your financial operations and help your startup grow faster.
What to look for in a candidate
Start by finding candidates with formal qualifications in accounting or finance, preferably with CPA or CMA certifications. They should have deep knowledge of accounting principles (GAAP or IFRS) and be skilled with financial systems like NetSuite or QuickBooks. Technical skills matter a lot, but your ideal candidate should also show strong leadership, communicate well, and have absolute integrity. Startup experience makes a big difference – candidates with 5-10 years in similar settings will understand your challenges better.
Financial controller duties description in job listings
Your job descriptions should spell out responsibilities and expectations clearly. Make the scope crystal clear – the systems they’ll work with, their ownership areas, and what success means. Be upfront about your company’s size, stage, and financial situation. The books might be messy, and that’s okay to admit. The right candidate will see this as a chance to make an impact.
When to consider part-time vs full-time
A full-time controller isn’t always needed right away. Companies with modest revenue and straightforward finances might find that a part-time or fractional controller is enough. This lets you access experienced talent without paying a full salary. But once you deal with complex operations – like multiple entities or international transactions – you’ll need someone full-time.
How to budget for the role
Location and experience heavily influence financial controller salaries. The average base salary in the US reaches about NZD 183,238 yearly. Part-time controllers typically charge NZD 42-51 per hour for startups. Don’t forget extra costs like recruiting, benefits packages, and training. Great finance professionals justify their cost – quality really shows in this field.
Conclusion
The decision to hire a financial controller remains one of the most significant choices growing startups face. We’ve explored in this piece how controllers deliver nowhere near just managing daily accounting tasks. These financial guardians ensure accuracy, compliance, and strategic insight at every stage of business growth.
Many founders put off this vital hire until financial problems become overwhelming. This approach often results in missed opportunities and unnecessary stress. Waiting too long means struggling with unreliable financial data right when you need it most to make important business decisions.
A financial controller can turn chaotic financial processes into efficient operations that support growth instead of hindering it. The signs we’ve discussed will help you make this decision at the right time – excessive time spent on financial admin, delayed reporting, upcoming fundraising needs, overwhelmed accounting staff, and compliance risks.
The role offers flexibility in your approach. Your specific stage, revenue, and complexity determine whether you need a full-time hire or a part-time controller. Finding someone with the right qualifications, experience, and cultural fit for your organization remains the priority.
Your startup needs a solid financial foundation that matches its innovative vision. Investing in proper financial leadership before problems arise will pay dividends through better decision-making, increased investor confidence, and steady growth. Financial controllers might not be the most visible heroes in the startup world, but they definitely help write the success stories behind the scenes.
FAQs
Q1. At what stage should a startup consider hiring a financial controller?
A startup should consider hiring a financial controller when it reaches about $1 million in annual revenue or immediately after securing $1 million in funding. However, the need may arise earlier if the company is experiencing rapid growth, preparing for fundraising, or facing complex financial challenges.
Q2. What are the main responsibilities of a financial controller in a startup?
A financial controller’s main duties include managing financial reporting processes, overseeing budgeting and forecasting, ensuring compliance with financial regulations, supervising accounting staff, analyzing financial data for decision-making, and implementing internal controls to safeguard company assets.
Q3. How does a financial controller differ from a CFO?
While both roles focus on financial management, a financial controller primarily handles day-to-day accounting operations and internal reporting. A CFO, on the other hand, takes a broader, more strategic approach, focusing on external-facing responsibilities like investor relations, capital raising, and long-term financial planning.
Q4. What are the signs that indicate a startup needs a financial controller?
Key signs include spending excessive time on financial admin tasks, consistently delayed or inaccurate financial reports, preparing for fundraising or due diligence, an overwhelmed accountant or CFO, and experiencing cash flow issues or compliance risks.
Q5. Can a startup hire a part-time financial controller?
Yes, startups can consider hiring a part-time or fractional controller, especially if their revenue is modest and financial needs are straightforward. This approach provides access to experienced talent without committing to a full salary. However, as operations become more complex, a full-time controller may become necessary.
