04/04/2020

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Good Controller/Bad Controller – CFO

Back in 2012, Ben Horowitz published an report titled “Very good Merchandise Manager/ Undesirable Merchandise Manager.” We borrowed from his structure as we assessed a vital position in a quick-increasing company’s finance organization: the controller. (See our preceding column, Very good CFO/Undesirable CFO.) Exclusive many thanks to Aman KothariDarko Socanski, and the Bessemer Undertaking Associates CFO Advisory Board for their contributions.

Getting the right company controller for the scale and stage of expansion for your organization is important. If your enterprise is a compact, quick-increasing organization, a “big company” controller may perhaps be unable or unwilling to roll up their sleeves to lean in and enable deal with your most significant concerns. If your organization is more experienced, an fantastic, palms-on compact enterprise controller may perhaps have difficulty developing a powerful group and wondering and performing strategically.

The “goldilocks” controller has the right mix of techniques and passions for your present challenges with the potential to scale the enterprise in the quick-to-medium term. As an organization scales it isn’t uncommon for the controller to both be upgraded or for a chief accounting officer to be employed more than them to enable bridge gaps.

Adam C. Spiegel

Whether or not you have to have a more nimble, palms-on controller or a big-picture, strategic controller, here are some common features to take into consideration in the choice and analysis course of action.

A great controller can establish and lead a powerful accounting group. He or she hires the right people for the position and for the group and enterprise lifestyle. A bad controller is challenged on this front — he or she mis-hires and winds up accomplishing all of the function themselves, then complains about it to everybody who will listen.

A great controller organizes for accomplishment. He or she designs their organization in a way that optimally supports the company now and that can be flexible to meet up with changing quick-to-medium term requires. A bad controller hires bodies to “get the task done” and doesn’t have time to consider about what will come subsequent.

A great controller takes advantage of their innate comprehension of each and every group member’s aspirations and constraints to get the best out of them. A bad controller simply cannot inform the big difference concerning great talent and bad talent. He or she is frightened to improve the group because of the added function they’ll have to have to do through the changeover period of time.

A great controller sets clear anticipations with the group and follows up. He or she sets goals for themselves and their group concentrated on continuous course of action advancement. He or she asks heaps of open-ended questions and learns from the solutions. A bad controller does things the way the last controller did them without having ever inquiring why. Undesirable controllers have no have to have to inquire questions as they presently know all of the solutions.

At a more compact enterprise, a great controller enjoys remaining palms-on and is joyful with that as an ongoing portion of their task, comfortably working equally as a preparer and a reviewer. A bad controller in this sizing enterprise resents having to do the depth function themselves and doesn’t hassle to review the function of subordinates.

Jeff Epstein

A great controller “owns it.” He or she is willing to do no matter what it requires to get the task done and will function shoulder to shoulder with the group through all those very long shut or pre-audit evenings. The bad controller punches out immediately after their eight several hours no matter of what is likely on in the office, leaving the group driving to fend for themselves.

A great controller is rapid to distribute the credit rating and sluggish to distribute the blame. He or she requires pleasure in the team’s successes and owns their failures. The exact same miscalculation doesn’t take place yet again because it will become a training moment and a lesson is uncovered. A bad controller requires credit rating for others’ successes and blames some others when things go completely wrong. There is no training and the exact same problems take place more than and more than yet again.

A great controller is super services-oriented and ensures that the finance group provides fantastic services to its prospects (the rest of the organization). A bad controller doesn’t consider that finance has any prospects and ignores the requires of the other departments.

A great controller communicates effectively, equally inside of finance and to the broader organization, recognizing that he or she is portion of a collective group that only succeeds alongside one another. A bad controller is effective in a silo and doesn’t inspire collaboration.

A great controller understands processes, systems, and their fundamental information and will function closely with engineering and IT companions to get the best out of their technologies equipment. A bad controller doesn’t put into action systems jobs because he or she simply cannot uncover the time. Undesirable controllers maintain up the migration from QuickBooks because they like the flexibility to be capable to go back again to edit shut durations.

A great controller makes correct economical statements on a predictable agenda and has a plan to enhance on their timeliness and comprehensiveness. He or she understands that having to a a lot quicker every month shut means that the group will have more time each and every thirty day period for course of action advancement, making the subsequent every month shut even greater. In a larger non-public enterprise, the great controller has a plan to lessen every month shut to a general public enterprise timeframe even though also keeping the sanity of the group. The bad controller takes advantage of the overall thirty day period (or more) to shut the guides, leaving no time for course of action advancement and leaving the group perpetually in a condition of exhaustion and anxiety.

A great controller inherently understands and is fluent in the greater part of the operational and technological accounting ideas related to the company. At a more compact enterprise, the controller could not have the exact same depth of technological accounting understanding but he or she will nevertheless be fluent in the vital ideas so as to know when to inquire added questions or flag concerns. The bad controller assumes that the auditors will determine out all of the technological accounting concerns in the audit so he or she minimizes their energy expended on investigating them.

A great controller builds a powerful and constructive working romance with the audit associate and is unafraid to have interaction in trustworthy and open dialog all-around important inner concerns. Good controllers converse normally and share the common target of “getting things right” and averting surprises. The bad controller dreads every single discussion with the audit associate out of dread that his or her incompetence will be uncovered.

A great controller is ethically and morally grounded and is unafraid to problem and have interaction with some others at all concentrations of the organization in conversations about ethical concerns. A bad controller lives in dread for their task and consequently will cover from difficult concerns.

A great controller jobs gravitas and can associate effectively with executives and some others across the organization. A bad controller is not comfortable when interacting with some others and it reveals.

A great controller seeks out mentorship and steerage and is concentrated on self-advancement. A bad controller just “does their job” as he or she doesn’t have the bandwidth to do any more.

Adam Spiegel served as CFO for a sequence of general public and non-public significant expansion technologies organizations which include RPX and Glassdoor. Formerly he invested more than a 10 years as an financial investment banker for the Credit history Suisse First Boston Technology Team and Prudential Securities, completing transactions valued at more than $eight billion. He now mentors CFOs and advises other executives of significant expansion technologies organizations.

Jeff Epstein is an running associate at Bessemer Undertaking Associates and a lecturer at Stanford University. He specializes in marketplaces and company-to-company software organizations. He serves on the boards of directors and audit committees of Kaiser Permanente, Twilio, Shutterstock, and various non-public organizations.

Bessemer Undertaking Associates, contributor, controller, Glassdoor