in-house controller vs. virtual controller services

In-House Controller vs. Virtual Controller Services: What’s Best for Your Bottom Line?

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Many of you have probably thought, “Starting a business should be simple.”

Saying so is one thing, but it’s easy to fall short on the financial aspect.

Many companies operate without marketing budgets or have generally poor money management skills.

You need help managing your finances.

So here’s the question: In-house controller vs. virtual controller services, which is better for your business?

Which of these financial overseers will work best for you?

There is much to cover regarding who does what in business finance and which type of controller is the better choice.

Read on as we discuss controllers, what virtual controllers are, and which is better for you.

Accounting Staff Members and Their Roles

Accounting teams are comprised of many members.

Before we talk about which type of controller is better, we need to discuss what controllers and other members of an accounting team do.

Bookkeepers

The first people we’ll talk about are bookkeepers.

Bookkeepers are employees who keep tabs on a company’s day-to-day financial transactions.

They maintain financial journals and perform bank reconciliations.

Reconciliation is when you compare figures and records to see if they agree.

Part of reconciliation is also ensuring that reports in the general ledger (records of financial transactions) are consistent and complete.

Think of bookkeepers as the guys who take organized notes for the accounting team.

Accountants

The terms “bookkeeper” and “accountant” are often used interchangeably, but aren’t quite the same.

An accountant may handle financial records and crunch numbers like a bookkeeper would.

However, they generally operate on a larger scale.

An accountant’s tasks may vary depending on where they work, but their jobs often involve:

  • Account analysis
    • Evaluating important financial records
  • Reviewing financial statements
  • Performing tax services like return preparation
    • They also conduct routine and annual audits
  • Providing financial advice
  • Performing risk analysis
    • Predicting the likelihood of financial threats and their impact
  • Performing forecasting
    • Using past data and current trends to predict the financial future

Here’s an easy way to look at the difference between these jobs: Bookkeepers gather small pieces of a company’s financial data, and accountants organize the information.

Controllers

People running a small business may argue that it’s not large enough to hire a controller.

The logic is often that the business isn’t extensive enough to justify the cost.

This is not true.

A controller’s role may depend, in fact, on how big your business is.

A smaller company would use a controller to build its accounting infrastructure and handle bookkeeping.

Accounting infrastructure involves creating systems to guide company accounting functions.

These systems must operate under legal frameworks and accepted accounting standards

Larger companies use controllers to oversee the accounting and finance staff.

They manage the company’s daily assignments and operations.

A controller also approves company-wide financial data.

Here is a list of what a controller does:

  • Chooses accounting and financial processes for daily operation
  • Serves as point of contact for accounting and company executives
  • Preps quarterly or yearly budgets
    • They also compare the budget against yearly expenditures
  • Oversees and approves reports done by the accounting team
  • Helps with tax services like preparing audit documents
    • Makes changes to ensure audits meet compliance
    • Files business taxes including quarterly sales tax forms
  • Oversees and approves bookkeeping figures
    • Uses this data to create reports for other areas in the company

We can summarize a company controller’s job as building on financial preparations bookkeepers and accountants made.

They take the gathered financial data and use it to make complete records for the business.

In-House Controller vs. Virtual Controller Services: Which is Better?

Which type of controller is better depends on your specific needs.

If you have (or desire) a big in-house accounting team or daily financial advice and can afford another employee, you may want an in-house controller.

If you have a small business and you want financial advice and someone to communicate regularly with your bookkeepers and accountants without adding another employee, you may wish to hire a virtual controller.

Virtual controllers technically don’t work for you but a third-party accounting firm.

They don’t need office spaces, supplies, or computers, so they’re cheaper than their in-house counterparts.

What Is a CFO?

So, we have bookkeepers who gather data and accountants that compile the data.

Controllers take this information and make detailed, highly accurate records for the company.

But what does the CFO do?

The chief financial officer is the next level above the controller.

They use the data the rest of the accounting team gathers and organizes to make financial decisions for the company.

The controller is ultimately responsible for making reliable business records.

A CFO’s responsibilities include the following:

  • Tracking cash flow
  • Analyzing the company’s economic weaknesses and strengths
  • Creating specified financial plans
  • Estimating the impact of potential decisions
  • Communicating financial results

Should My Small Business Have a CFO?

If you thought your business was too small for a controller, you may have assumed the same about a CFO.

While CFOs seem exclusive to Fortune 500 companies, nothing is keeping you from having one.

You can opt for a virtual CFO (VCFO), instead. VFCOs are like virtual controllers in that they’re cheap.

VFCOs are not employed by you but by a firm.

They’re paid hourly, so you’re only charged for the time they help you.

A virtual CFO may also be convenient because you don’t have to provide office space, supplies, or a computer.

Online communication is beneficial for companies that may not have much space for workers or paperwork.

Work With the Tax Experts

“In-house controller vs. virtual controller services, which is better?”

The answer depends on your needs.

In-house controllers make sense for larger businesses with funds to spare.

Virtual controller services may work best for smaller companies that don’t want to spend the money.

If you need a reliable controller, CFO, or tax expert, consider working with Master Accounting & Tax Service.

MATS has 20 years of payroll and tax experience, and we also provide staff consultation for businesses.

So don’t wait.

Contact us for assistance with your business’s financial and accounting needs.

Ready to optimize your business’s financial management with the help of controller services in CA? At Master Accounting and Tax Service, we specialize in providing top-tier accounting, tax, bookkeeping, and fractional CFO / controller services at an affordable cost and with the utmost integrity. Call (480) 456-4999 or Contact us today!