United States: Eight Signs Your Controller Is Holding Your Business Back

Last Updated: August 21 2019
Article by Chris Arndt

Your controller should be an integral part of your strategic plan to scale. In fact, they should be a strategic partner in most aspects of growth.

When small problems affecting your business growth begin to seem anything but small, it may be time to examine whether your finance team is helping you scale or stunting your growth. Here are eight signs your controller is holding your business back.

  1. Your Controller is Always Running Behind and Making Excuses
    Here is the truth: Your controller should be a strategic financial partner who is as proactive as you are about your business success. Or nearly, anyways. If your controller is often making excuses and falling behind, they are not in a position to help you grow. Operating with old financials is a huge hurdle to setting up your business to scale. Find out why requests and/or closing the books is taking longer than it should. Look for an accountant or service that keeps you in the loop before you even knew you had fallen out of it.
  2. You Do Not Know Anyone Else on Your Accounting Team Besides Your Controller
    If you are not allowed to speak to anyone else on the accounting team because your controller is a control freak (excuse the pun), that is hurting your company's ability to scale. Here's what I have noticed about accounting teams bottlenecked by a controller who cannot delegate: They end up with high turnover because anyone good does not stick around long.
  3. You are Not Even 100% Sure What They do for You
    A sad but true reality of the relationship between business owners and controllers is this: They hand off the monthly and yearly financial work and then remain in the dark about what their controller is doing behind the scenes. If your goal is to scale, you should be an integral part of conversations about managing your finances. Even if the majority of the work has been delegated to a controller, there is no one who knows your industry better than you.
  4. You are Always Having to Explain How Your Industry and Market Work
    Speaking of, while you will inevitably be the expert on your business, a true financial partner should get to know your industry and market environment in order to best advise you on strategic decision making. Look for a financial partner who, from the outset, can prove they at least understand the high-level operations of your business and where you should be headed.
  5. They Only Focus on Pinching the Bottom Line
    Controllers generally tend to hang in the backward-looking financial safe zone, focusing on shortcuts instead of strategies. The traditional view of accountants is that we are holding you back, pinching the bottom line (e.g., "This is how to save 10% more by cutting salaries"). That is not helping anyone scale. You want to grow by paying the best people to do the best job. What are your goals? Do you know which key drivers will get you there? If you don't, your controller should. If they are getting defensive when you ask them these questions, consider it a red flag: Your controller is holding your business back. They should be able to help identify those metrics and clearly tie those KPIs to budget items. We are firm believers in the importance of budgeted drivers in order to see revenue growth.
  6. Faxes, Photocopies and Accordion Files are Their Go-To File Management System
    If your data is a prisoner of paper, it cannot be accessible for analysis. Perhaps it goes without saying, but if your controller is still holding on to snail mail and paper filing, it is time to rethink your go-to money person. Admittedly, the accounting industry has not always been on the forefront of technological advances. That said, there are hundreds of cloud solutions that are specifically catered to finance departments. Your controller should be investigating the best options to get you real-time data.Imagine fine tuning your marketing and sales strategy without current numbers behind customer acquisition cost or inventory turnover. Many companies operate this way, but it does not make it right. Having that accessibility is paramount to saving employee time and providing resources to other essential departments for scaling.
  7. They Do Not Explain How to Read Financial Statements
    If you are in the dark, it could be a sign your controller is too. If you ask your controller to explain budget variances, and they cannot easily and concisely explain it to you, that is a problem. For example, if you are looking at your year-to-date (YTD) marketing expense, and it is double your budget and your controller cannot tell you why, they are definitely holding your business back.
  8. All Debt is Bad
    It is not. It really is that simple. While you certainly want to show investors and other stakeholders that you are in a good cash flow position, if you are reinvesting in order to grow, that is a perfectly acceptable reason to be short-term in the red. Your controller should be a solid financial partner in that decision-making. They should be able to demonstrate to your stakeholders the projections to support that investment in growth. Debt used in a responsible way can be very beneficial to accelerate growth. In fact, in many instances, compared to equity, debt can be cheaper, providing tax savings to a company.

When you are ready to scale, the last thing you need is someone on your team impeding your growth. By using the eight signs above, you will know if your controller is holding your business back.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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