How an Outside Controller Can Help Improve Your Small Business Finances

By Jennifer Pollinger, Founder and Managing Partner, JLW Business Advisors LLC

 

As a small business owner, you may have engaged an outside controller or accountant to clean up your financials for annual tax planning and preparation. However, wouldn’t it be beneficial to have an on-call financial and business advisor throughout the year to assist with understanding financial statements, management reports, and analyzing data to make more informed decisions? In this article, we will discuss specific ways an outside controller and advisor can benefit your small business and recommend ways to improve the financial health of your company.

How an Outside Controller Can Help Improve Your Small Business Finances: Continuous Support and The Ability to Train Your Staff to Maintain Accurate Financial Data.

To maintain accuracy and consistency in your financial data, an outside controller can provide continuous support and training to those involved in maintaining the books on a daily basis. As a small business owner, you will most likely have a bookkeeper, office manager, or are even performing the accounting duties yourself. Utilizing an outside controller, as needed or when questions or non-routine transactions arise, is much easier to deal with in the moment rather than correcting those transactions, after the fact. For example, when an inspection of the books is required for audit purposes in a period long after the transaction originally took place can be quite costly and amended tax returns might be required.

An outside controller can also help to reduce time and cost savings during the monthly routine of closing the books. Ensuring proper accounting procedures are being followed throughout the year will reduce the time for the year end close. One often overlooked accounting procedure is the segregation of duties. An outside controller can review the current segregation of duties and make recommendations. For example, the person who opens the mail should not be the person who does the required entries and deposits the checks.

How an Outside Controller Can Help Improve Your Small Business Finances: Objectively Assess Workflow Processes to Improve Accuracy and Speed of Information Delivery

An outside controller can objectively assess the current state and workflow processes used to manage the accounts receivable, accounts payable and payroll functions. From this assessment, we can recommend areas for improvement, switch from manual data entry to automation, as well as better utilization of the accounting software, which will improve accuracy and speed of information delivery.

A workflow assessment can also map out each step to create an easy-to-follow checklist for the end of month close.  Which will help your staff and you understand where exactly what needs to be done in what order to create a smooth five-day end of month close.

How an Outside Controller Can Help Improve Your Small Business Finances: Recommend Ways to Strengthen Internal Controls to Minimize Fraud

An outside controller can recommend ways to strengthen internal controls and practical segregation of duties to minimize the occurrence of fraud. Mid-sized companies and larger corporations design, implement, and monitor their internal controls, and the right outside controller can bring these benefits to your small business, as well.

As a small business owner, you must protect your business like you protect your family. Internal controls prevent fraud and costly mistakes.

In conclusion, an outside controller can yield many benefits for small businesses. For example, ensuring accurate and consistent data for better decision making and turning that data into a tool for better planning and budgeting. By continuously supporting and training staff, objectively assessing workflow processes, recommending ways to strengthen internal controls, and providing examples of successful implementation, small business owners can improve the financial health of their companies. So, decide if an outside controller is the best decision for your business.

 

Contact us today to see what an outside controller can do for your business.