As your business grows, managing your financial affairs becomes more complex. Hiring a financial controller can help you with this and ensure the accuracy and currency of your financial records. They will oversee the entire accounting process, provide insights into whether your business is profitable, and help you identify areas of improvement that contribute to business growth and increased annual revenue.
If you are a small business or a startup, you might not have the resources to hire an in-house or full-time controller or enough work to keep them busy.
Opting for an outsourced controller will help you benefit from the same financial services as a traditional controller without straining your budget. You will also have the flexibility to adjust the level of their involvement based on your evolving business needs.
This article explains what an outsourced controller is, what kind of services they offer, and why outsourcing this role may be the optimal decision for your business.
What Is an Outsourced Controller?
An outsourced controller is a financial professional who oversees the entire finance department within companies that provide financial or Chief Financial Officer (CFO) services. They are mainly responsible for managing financial operations, updating and maintaining the company's books, and ensuring accurate and timely financial reporting. They also play a crucial role in ensuring compliance with financial regulations and optimizing the company's financial strategy operations and cash management.
Outsourced controllers can be either independent contractors or part of a third-party financial controller company. As independent contractors, they work on a project basis and provide their services directly to the client company. On the other hand, if they’re part of a third-party financial controller company, they will provide financial assistance to multiple clients.
Learn more about finance outsourcing and its pros and cons in our previous article.
What Are the Services of an Outsourced Controller?
The specific services offered by an outsourced controller may vary depending on the needs of the company. Below, we outline some key outsourced controller services:
Management of accounting and bookkeeping processes
An experienced controller works with the company to develop, monitor, and enforce a comprehensive set of internal controls that help safeguard the company's assets, mitigate risks, and maintain the integrity of financial data.
In addition, outsourced controllers assist in overseeing external audits as required by the board or bank mandates and maintaining well-organized, up-to-date, and easily accessible records for due diligence purposes. Well-maintained records instill confidence in potential investors, partners, or acquirers evaluating the company's financial health.
Outsourced controllers prepare and review monthly and annual financial reports, including consolidated financial statements, income statements, balance sheet statements, and cash-flow statements.
They also implement accounting systems and controls to mitigate the risk of misstatements in financial reporting and ensure compliance with US Generally Accepted Accounting Principles (GAAP) and established accounting standards.
Moreover, they take ownership of the financial reporting process. They create narratives that explain the company's performance and the variances to budget/forecast. These reports are then distributed to senior management and key stakeholders for informed decision-making.
Budgeting and forecasting
This service refers to the implementation of a process-oriented approach to ensure accurate maintenance of various books of accounts and monthly reconciliations of the general ledger accounts. With precise budgeting and forecasting, companies benefit from reliable financial systems and data and can effectively plan for the future.
Outsourced controllers also actively engage in cross-functional interactions to better understand business issues. They work closely with different departments and stakeholders to identify factors that affect the underlying accounting treatment in areas such as revenue recognition, expense recognition, asset valuation, and depreciation methods.
As a result, these collaborative activities permit budgeting and forecasting processes to align with the specific needs and objectives of the organization, while enhancing the accuracy of financial records, promoting transparency, and facilitating informed decision-making throughout the accounting processes.
Outsourced controllers have a foundational understanding of corporate income tax regulations and requirements. They consistently keep up-to-date with the ever-changing tax laws to ensure their clients stay compliant, avoid penalties, and fulfill their tax obligations efficiently and effectively.
In some cases, outsourced controllers may work with third-party tax advisors to handle complex tax issues or seek specialized expertise. They take on the role of managing these external advisors, including coordinating their activities and ensuring that their work aligns with the client's tax compliance needs. This usually involves providing necessary documentation, facilitating communication, and overseeing the quality and timeliness of deliverables.
Outsourced controllers conduct a thorough analysis of the company's financial data, processes, and operations and look for any gaps or bottlenecks that might hinder their effectiveness and efficiency and whether they align with industry best practices.
They also review expense patterns, identify areas of excessive spending and suggest strategies to reduce costs without compromising productivity or quality. This may include evaluating vendor contracts, renegotiating terms, or identifying alternative suppliers or solutions.
Based on their findings, outsourced controllers provide recommendations for streamlining processes, enhancing controls, and improving overall efficiency. The goal is to help the company achieve cost savings while maintaining financial stability and operational efficiency.
Outsourced controllers can help you establish and maintain internal controls that safeguard the revenue receipts, costs, program budgets, and actual expenditures. They put appropriate controls in place to mitigate risks and prevent unauthorized activities.
They also work closely with their clients to develop and document business processes and accounting policies to maintain and strengthen those internal controls for the company's financial integrity. This may involve implementing segregation of duties, improving authorization and approval workflows, or introducing automated systems to minimize the risk of errors or fraud.
Why Do Companies Need an Outsourced Financial Controller?
By outsourcing the controller function, companies can benefit from the expertise of skilled financial professionals without the need to hire a full-time, in-house controller.
But there’s more:
Outsourcing controllers is generally a more cost-effective solution compared to hiring an in-house controller, especially for SMBs with limited financial resources.
Hiring an in-house controller comes with the expenses of a full-time employee, including salaries, benefits (health insurance, retirement plans), paid time off, and other employee-related costs. According to Glassdoor, the salary of a full-time financial controller ranges between $106k/year and $175k/year; depending on their experience, it can jump up to 218k/year.
In contrast, by outsourcing, companies can access the expertise of controllers at a more affordable rate and tailor it to their specific needs and budget. They can pay for specific services without the burden of additional overhead costs and redirect those resources to other critical areas of their business, such as product development, marketing, or growth initiatives.
Access to financial experts
Recruiting and training an in-house controller can be time-consuming and expensive. Outsourcing eliminates these costs; companies can tap into a pool of experienced financial professionals who are already well-versed in their field.
You can also hire an outsourced controller to augment your existing financial team. Since they always stay updated with the latest financial trends and emerging technologies, outsourced controllers can introduce new expert knowledge or practices that enhance the capabilities of your accounting staff and drive better financial outcomes.
In the early stages of a business, the financial needs may not be as complex, and hiring a full-time controller may not be necessary or cost-effective. Outsourcing this role makes it easier to control which services companies can avail as they scale their operations.
This flexibility to scale on-demand is particularly beneficial for small businesses and startups that often face resource constraints in the early stages and do not yet have an established financial team. In fact, according to a recent Clutch survey, along with reducing costs and filling skill gaps, scalability is one of the top three reasons small businesses choose outsourcing.
Focus on core business processes
Outsourcing controller services alleviates the stress of handling financial processes. This leaves more room for companies, especially small businesses with limited resources, to focus on their main line of work. But most importantly, it frees up their time to design and implement initiatives that drive growth and increase efficiency.
Bonus resource: Are you struggling to decide between hiring an in-house controller or partnering with a staffing firm to outsource the role? Discover the advantages of keeping your outsourced controller on the staffing firm's payroll vs. hiring in-house in this article.
Best Outsourced Controller Services
We outline below some of the most popular outsourced controller firms (in no particular order) that can help you run your business finances better.
1. Driven Insights
Driven Insights is a reputable outsourced financial service provider with 15 years track record in the industry, mainly serving SaaS companies and SMBs. They cover various aspects of financial management, including CFO, controller, and bookkeeping. Some of the specific services they provide are day-to-day accounting, budgeting, process management, KPI development, reporting, cash flow management, financial analysis, and strategic planning.
In terms of scalability and costs, Driven Insights can adapt their services as a business expands or experiences changes in its financial needs; namely, from controller to CFO, and from fractional to full-time. The costs vary on the level of their involvement — companies who want to know more about their costs must ask for a quote.
AccountingDepartment.com is an accounting firm founded in 2004 that offers accounting, bookkeeping, and controller services for businesses with annual revenue between $2 Million and $100+ Million.
This company is mainly offering accounting services that include financial analysis, cash flow forecasting, implementing accounting & operational workflows, cost projection, and reporting. It’s important to note that they do not provide tax services, including but not limited to tax preparation, tax law, tax compliance, tax filing, and tax planning services.
GrowthForce specializes in outsourced controller services for small and medium-sized businesses. They have over 35 years of experience in providing financial solutions to companies operating in engineering, marketing, architecture, and nonprofit industries.
Some of the services they offer include payroll processing, account payable and receivable, sales tax processing, financial reports, month-end close, cash flow forecasting, job costing, budgeting, and audit/tax support.
GrowthForce's pricing structure is determined based on the specific needs and size of each business. More specifically, they offer scalable accounting services through three custom packages: essentials, advanced, and complete.
4. Peters, Johnson, Staley & Co. CPAs
Peters, Johnson, Staley & Co. is a certified public accountant firm specializing in offering virtual CFO, controller, and historical accounting services to attorneys, construction companies and contractors, and dentists.
Depending on the individual needs and the business size of each client, the company will assign a CFO or a controller and a team of accountants. The later are then responsible for tasks such strategic planning, financial modeling, budgeting, forecasting, accounts payable, and receivable, cash flow analysis, budgeting, financial reports, and advice on operational improvements among others.
In terms of fees, they vary from $2500 to $8500 per month. But then again, the amount you pay depends on the level of engagement and your needs.
5. Supporting Strategies
Supporting Strategies is a US-based company with over 18 years of experience that helped more than 4000 small and medium businesses streamline their financial processes. Their services vary from accounting, cloud bookkeeping, financial analysis, and payroll administration to controller services and operational support functions.
Their service packages are customized to address the specific requirements and budget of each business and scale as their needs evolve.
6. CLM Controller
CLM Controller is an accounting firm from Brazil that offers accounting, tax, financial and payroll solutions to small, mid-market, and enterprise businesses. They have over 40 years of experience working with clients operating in industries such as telecommunications, advertising and marketing, information technology, automotive, and consumer products.
While Near is not an accounting firm, we can help you find and attract qualified financial experts from Latin America that will help you bolster your business.
We understand that as a small business or startup you might have limited resources, or you might not need the services of a full-time financial controller. With Near, you get a win-win solution: because the cost of living in Latin American region is lower than the US, you pay a fair wage for the LatAm-based worker, while benefiting from a lower cost than the US market and the same quality.
Near’s database consists of more thank 15K pre-vetted LatAm candidates with exceptional English skills. All you need to do is to let us know the level of financial services you require, and we will provide a list of candidates that you can interview at no cost.
Our pricing structure is transparent and flexible. Once you've found your ideal match, you only pay a percentage of the selected candidate's monthly rate. In the event of compatibility issues, we guarantee a free replacement to ensure your satisfaction and minimize any disruptions.
By opting for outsourced controllers, you can tap into a pool of seasoned financial experts who will keep your financial records accurate and up-to-date; you will also enjoy expert financial advice without breaking the bank.
Moreover, the flexibility of outsourcing allows you to only pay for the specific services you need without the added expenses associated with a full-time, in-house employee.
If you are considering outsourcing your controller function, Near can help you find the perfect match for your company's needs. With our expertise and network of skilled financial professionals from Latin America (LatAm), we ensure that you receive top-notch controller services tailored to your requirements at lower costs than the US market.
Schedule a complimentary consultation call with us today and get a list of pre-vetted LatAm candidates you can interview for free.