Bursts of Color - Onboarding a Controller
One of you recently hired a Controller and turned to our partner Rob for advice on the best way to set things up. I thought the resulting exchange had many valuable nuggets, so I’ve pasted an edited thread below.
For context: this company has roughly 75 employees and $10m annualized revenue. The Controller is the company’s first Finance hire. In most situations, we would recommend hiring a generalist Head of Finance first before hiring an accounting expert, but much of the same stuff applies.
Related earlier posts: Of Plumbers and CFOs and The 3 Laws of Exec Hiring.
Q: Now that we have a Controller, I'd love your advice on how best to collaborate with her. My goal is to instill discipline in how we spend money, and to hold finance accountable for partnering with each of the department leaders to stay within budgets and make sound decisions.
A: You should make these goals clear... just tell her and all of the other company leaders that this is what you need her to do at the highest level. Knowing she has your support will be important.
Q: Beyond keeping the traditional stuff (income statement, balance sheet, statement of cash flows), what reporting should I request on a weekly/monthly basis?
A: For the first 6 to 12 months, I would stick to the basics. Focusing on the timely release of monthly financials at a department level is critical to allow for her to help hold the department leaders accountable (they need info in a format they can understand to track and manage their spending).
Probably 80% of your costs are headcount. So keeping track of headcount is going to be extremely important (understand hiring plans and if folks are staying within those plans). Another 10% of cost is probably software (AWS and other subscription licenses). That should have a clear department owner.
BTW, your cash controls should be bulletproof. If they are not already, she should be able to help with that. You may want to have her report cash on a weekly basis as compared to the previous 12 weeks so everyone can understand cash balance. I’m guessing there is another group that provides operating metrics (daily/weekly sales, customer count, churn, CAC, etc).
Q: What recurring meetings and cadence do you think would be most helpful?
A: A weekly 1:1 with you would be important...just to set the stage and make sure she's headed in the right direction. She should put together a 3/6/12 month plan that both of you agree with.
If you have a weekly exec staff meeting, include her as long as she is the most senior finance person. However, you should set expectations that when you hire a more senior finance exec (like a VP Finance or CFO), that person will attend the exec staff meeting instead.
She should also meet with each department head monthly to review their budget to actuals, and then do a monthly review of the previous financials and the forecast for the full group. This latter part doesn’t need to take more than 10 minutes per month, but gives it a level of visibility that she can use to hold folks accountable.
She should also be put in charge of managing the financial and tax vendors if she's not already. She would also spearhead an audit, if that’s something you decide to do.
Q: Were there any unusual routines with your CEO relationships that they found particularly useful or requested?
A: Permission to provide open and honest feedback all the time (both ways). This is critical. Checking-in outside of the normal 1:1 should also be encouraged when things come up.
Q: Does it make sense to hire a fractional CFO or someone else to complement our new Controller?
A: Probably yes. Remember that Accounting is just one part of Finance… and now that your volume is getting high, you will need someone to help think about how you scale the business more broadly. If you’re not ready to hire a generalist Head of Finance, I do think it would be worth getting a fractional CFO to help you scale and be a sounding board for the Controller. I think a few meetings per month is fine for now, but will highlight areas that need to be addressed. I can recommend a couple if you are interested.
Q: Anything else?
A: There’s actually a lot. But one thing to have her review is your processes and how things can be more efficient (order to cash and procurement to payment). Another thing is to look at your systems that can help scale your business. Things like employee expenses can be essentially automated for review, approval and recording into the financials. I’m also happy to spend more time with her.