Hiring a controller after a successful funding round makes financial reporting, assembling a team, and software implementation exponentially more efficient.
Congratulations! You were able to secure funding for your startup and now have capital to invest in your business. As a leader in the organization, there can be many conflicting priorities, and it can be difficult knowing where to begin.
1. Financial Reporting
One of the most common requirements for any business is to produce financial reports for stakeholders so they can see the financial health of the business. This only intensifies once you have received large funding from an outside lender or investor. Usually, they will want to see actuals against either a budget, forecast, or both to gauge if the company is on the correct path.
An experienced controller will make sure to set up internal controls and manage risk effectively so that financial reports can be sent out in a timely manner. If you don’t have efficient processes in place, then it can be significantly more challenging to get clear information to the executive team.
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The organization must be able to produce a three-statement model including income statements, balance sheets, and cash flow statements, in order to explain the financial health of the company. Otherwise, investors may think the company is not being effectively managed and trust can be lost.
Think of a three-statement model like chips and salsa at a Mexican restaurant. Everyone is very familiar with chips and salsa and it’s usually your first impression of the restaurant. If this appetizer isn’t good, then you may second guess your choice in dining.
Further, managing cash is crucial especially at an early stage of a company. Having everything accounted for appropriately will help the company make more impactful decisions.
2. Building Out a Team
To report financials and implement processes, a controller may need to hire and build out a team. This team will be crucial to executing the overall financial strategy of the organization. Having an effective leader who can build out a team will only make the organization stronger.
Additionally, this team will be relied upon when the company goes through an audit to provide support based on the requests submitted by the auditors. This process will take even longer and cost more money if the internal team is not organized. The last thing any company wants is a prolonged audit.
3. Software Implementations
There will be many software applications that a controller may want to implement to increase operating efficiency like AP module, expense reporting, or a capitalization management tool.
Typically, the most complicated implementation is for an enterprise resource planning system (ERP). This requires an experienced leader to work with third parties to successfully implement. It’s imperative an organization has someone who knows the business and the overall strategy before making a change to a new ERP. It is also helpful to learn and review the three critical elements of an effective ERP implementation.
Every organization needs a solid foundation, which is why it’s necessary to have an experienced financial leader building out the infrastructure for growth. This will make financial reporting, assembling a team, and software implementation exponentially more efficient and help to reduce the overall burden on the business.
Are you interested in learning more about fractional accounting and financial services? Contact us at 512Financial today.