I believe the controller is one of the most underrated positions in any organization. Unfortunately, CFOs get all of the love, and that means they tend to overshadow this critical position.
For most businesses upwards to $100 million in revenue, only a controller is needed, not a CFO. Many CEOs think the controller is the head bookkeeper. That’s just not true. My first accounting leadership positions were as a controller. Looking back, my peers would have said, “You were an acting CFO.” The point is that controllers are financial leaders, and they deserve a seat on your leadership team.
The question I get periodically is when to make that controller hire. Let’s back up a bit.
Your first bookkeeper may have been yourself or a spouse, or possibly the receptionist. Once you hit about $1 million, you brought in a bookkeeper. I recommend an accounting manager at $3 million regardless of the industry.
Adding the controller is hard to peg down. I’ve been a controller-CFO for a $23 million publishing company. Looking back, I would have guessed we needed a controller at around $10 million because of the complexities involved in that nuanced business model.
Accordingly, I’m going to suggest that you hire the controller at around $10 million. The better answer is that you make the hire before you need them.
The Four Accounting Roles
There is a boatload of definitions for the controller, and I always like to have a conversation about the four accounting roles before talking about the controllership title and what they bring to the plate.
In short, there are four distinctive roles in accounting:
- The Architect
- The Accountant
- The Administrator
- The Analyst
Take a look at the video where I go into detail about the four roles:
The Controller is Your Architect
The controller is like the engineer who builds an efficient manufacturing plant. The good ones are indispensable. And yes, they look like, smell like, talk like, and act like a CFO. That’s why I don’t get hung up on titles. I’m more interested in the role behind the title.
Hire your controller before you need them. They will be one of the best investments you’ve ever made in your growing business.