It might be time to consider working with a virtual controller if you’re ready to grow your business, but you’re not sure how. Or maybe you’d like to focus on the reason you started your business in the first place instead of all the numbers and analysis. If you could use a little help but aren’t ready for another full time employee, a virtual controller is a great option.
What is a virtual controller?
A controller is someone who manages daily accounting operations such as general accounting, bookkeeping, payroll, accounts receivable, and accounts payable. With all the technology that’s available today, this can all be done virtually, saving you time and money.
Here are eight things a virtual controller can help you with.
1. Prepare financial statements
You may be wondering why you would need a controller to prepare financial statements when most accounting programs will print these reports. Unless your bookkeeper knows all the accounting rules, there’s a good chance those statements will need to be adjusted before they can be used for things like preparing your tax return or applying for financing.
2. Analyze key performance indicators
Key Performance Indicators (KPIs) are an important way to track your business’s progress toward your goals. A virtual controller can analyze KPIs from data such as a trial balance. They can also be analyzed based on financial statements prepared in-house or by the controller. Which KPIs you track depends on your industry.
Knowing from month-to-month how your KPIs look can help you make adjustments to things like spending and marketing in order to help you meet your goals.
3. Plan budgets and forecasts
Although the words are sometimes used interchangeably, budgets and forecasts aren’t the same thing. A budget is based on funds available, so it is created with cash in mind. It can be hard to know for sure how much cash you have. This is because cash flow is often based on sales that fluctuate.
A forecast is more detailed than a budget and is ever-changing. Where a budget may be created each month to monitor spending, a forecast might be created for an entire year. Forecasts are often adjusted as business performance dictates. Forecasts are often created with current, past, and predictive information in mind.
A virtual controller can help you with both of these. They are both useful tools for monitoring your cash flow as well as progress towards your business goals.
4. Explain your cash flow
Sometimes it feels like you made a lot of money during the year, but it disappeared almost as fast. A cash flow statement can help make sense of this by showing you how cash flowed into and out of your business.
The cash flow statement starts with last year’s closing bank balance and ends with this year’s ending bank balance. To get from last year’s bank balance to this year’s, you will have several transactions. These include things like sales, purchasing equipment, and increasing your financing.
This makes it easy to see where you spent your money.
5. Improve your bottom line
Having an external person, such as a virtual controller, tell you how to improve your bottom line can improve your accountability. Increasing revenue and controlling costs are two ways to do this. Sometimes you are so involved in your business, it’s difficult to know exactly what changes you need to make to accomplish this.
A virtual controller has objectivity and experience working with many different types of businesses. This can help them pinpoint the area you need to work on to help you see the most difference in your bottom line.
6. Follow up on overdue accounts
Let’s face it, not getting paid on time is a real drag. It’s even more of a drag to have to follow up with people who haven’t paid yet. A virtual controller can do this for you, freeing you up to do the things that only you can do.
Because a virtual controller is not a replacement for a collection agency, they do not instigate legal action on your behalf as far as collections go, but they can effectively help improve your accounts receivable turnover.
7. Pay your bills
On the flip side, a virtual controller can also pay your bills for you. It’s easy to get busy and forget to pay something before the due date. If you rely on supplies to come at a certain time every month, you may want to consider hiring someone to make sure the bills get paid on time so there’s no delay in your production process.
Since a controller will need access to your bank and credit card accounts to pay bills on your behalf, it makes sense to have them reconcile these accounts for you as well. This way, you will always know your current account balances.
8. A virtual controller can save you money
In addition to all of the above, working with a virtual controller can be a great way to get some extra help before you’re ready to hire a controller full time. Fractional controller services allow you to pay for the services you want on an as needed basis, saving you money until you’re ready to expand your workforce.
For example, if preparing payroll every pay period is taking a good chunk of time away from other things you need to do in your business, consider hiring a virtual controller to take over the payroll processing for you.
Before hiring a virtual controller, make sure they are up to date on the current accounting and tax rules. One way to ensure this is by hiring a CPA. CPA’s are required to take professional development training every year to brush up on changes in the industry.
At Virtual Heights Accounting, we only use cloud accounting software which makes it easy for us to provide virtual controller services. If you need help with any of the above services, contact us to book a free consultation.
