How to hire your first controller

Why and when to hire a controller

Hiring a controller becomes recommended when you start feeling the need for greater oversight of your books — when and how they’re managed, analyzed, and prepared every month. This may be due to your growth as a company; once you feel the need for a CFO and/or a team of accountants, you’ll need someone to oversee your accounting function in-house.

You may have certain policies and procedures you want to oversee more stringently than you are able with a vendor. That may be for legal reasons: In heavily regulated industries, financial compliance comes with very high stakes, requiring robust control of your books.

Cost is also a key driver for the decision to hire a controller. It may be a good idea once you’re spending almost as much on an external provider as you would to hire someone full-time.

Hire a controller at whichever point you reach earlier: When the financial operations of your business are starting to scale, requiring critical decisions around tools and processes, or when you are preparing to raise a round of funding that may necessitate your business completing an audit.

What is the best advice for hiring a controller?

1. Look for accounting experience with your revenue recognition model. Businesses these days may use one of a variety of revenue recognition models in their accounting, depending on their business model. These models include subscription, traditional installed software, usage-based, professional services components, hardware, and others. These models are specific and can be complex, which is why one of the most important things to look for in a new controller is solid experience executing the revenue recognition model your company uses. Revenue recognition must adhere to constantly changing accounting standards and rules, so a professional who is familiar with the processes and policies involved will be vital to your company’s ongoing success.
2. Focus on communication skills. Since one of the controller’s main tasks is acting as a liaison between the company’s leadership and its accounting function, it’s imperative that the person you hire can explain complex accounting topics to non-accountants. They also must have the fortitude to enforce processes and structures in the face of doubt and pushback from those who don’t know the details of why things must be done in a certain way. When hiring, focus on the candidates’ applicable “soft” skills — the ability to work with others, be diplomatic and tactful, explain themselves to colleagues, and hold firm kindly and respectfully. In short, the person you hire must be a good communicator as well as a good accountant.
3. Prioritize technical accounting over operational accounting experience.While the controller will need to do operational accounting in the role — that is, analyzing the financial aspects of running the company — those skills are best scaled with a foundation of solid technical accounting experience. While an ideal controller hire might well have both technical and operational accounting experience, if you have to prioritize one or the other, lean toward candidates with very solid technical chops.

Who is the best controller?

The best kind of controller will be a self-directed professional with well-honed technical accounting skills, excellent command of communication, and the wherewithal to build and manage an accounting team as the company grows.

Keep these qualities in mind once you’re ready to hire your own in-house controller, and you’ll soon have your accounting function in excellent hands.