Thank you to all the readers who have told me you want to know more about finance and business management but don’t know where to start. (Please, not Tik Tok.) I’m adding a new segment called What Does it Mean? I’ll cover a finance or business term each week.

Today, let’s talk about controllers. Controller is an accounting role between a bookkeeper and a Chief Financial Officer (CFO).

A bookkeeper will put your business expenses into tax-related categories and flow your spending through to some basic reports. They may not have formal accounting training, and that’s totally fine.

Same goes for a CFO. A CFO may or may not have accounting experience. It’s a big picture management role. Their job is to advise you (and potentially a board) on how to use the company’s money for growth, investment, and debt service, informed by financial reports.

Which brings us to the tweeny job: controller. A controller will transform your financial statements into useful information and elevate your reports into useful management insights. A controller should be able to build forecasts, evaluate labor costs, and assess margins and profitability. They will put systems and processes in place to reduce risks like theft, misappropriation, and errant bill pay. Typically, they have studied accounting, and may be working toward a Certified Public Accountant (CPA) designation.

When it’s time to level up, many small business owners ask for a CFO, but what they actually want is a controller.

If you want to know more, check out “Cash Flow Show: Accounting High” hosted by CPA Nikole Mackenzie of Momentum Accounting. A recent episode, 7 Signs You Need a Controller, gives scenarios for when you might need a controller and how to find and hire one.

What terms and management concepts do you want to know about?

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