What is an outsourced controller, and when does an SME need one?
Your accountant keeps you compliant; a controller tells you whether the business makes money and what to do to make more. Here's what they do and when it makes sense.
Many small businesses have up-to-date books and file their taxes on time, yet don't know which business line makes money, which customer is profitable or what cash will look like in three months. That gap is what management control covers, and the person who runs it is the controller.
What does a controller do?
A controller turns accounting into information you can decide with. The usual work includes:
- Management P&L: knowing what each business line, customer, product or project earns, not just the company as a whole.
- Budget and variances: comparing actuals each month with the budget and the previous year, and explaining the differences.
- Key indicators (KPIs): margin, EBITDA, cash, productivity per employee, collection period.
- Cash flow forecast: spotting cash pressure before it arrives.
- Follow-up with management: a regular meeting to review the numbers, decide and check that decisions are carried out.
How is it different from your accountant?
Your accountant or accounting department looks backwards and outwards: recording what happened and meeting tax and Social Security obligations. A controller looks inwards and forwards: what is happening in the business and what to do about it.
One doesn't replace the other; they complement each other. An outsourced controller can work with the information your current accountant already produces, so you don't have to change.
Signs your SME needs a controller
- You're invoicing more than last year, but you're not sure you're earning more.
- You find out the year's result when the accounts are closed, months later.
- You don't know which customers, products or projects are really profitable.
- Cash keeps causing surprises, or costs grow without you knowing where or why.
- Your bank or a partner asks for financial information and it's hard to prepare.
If two or more sound familiar, management control will probably save you more than it costs.
In-house or outsourced controller
An in-house controller makes sense in larger companies with enough volume for a full-time person. In an SME there's usually too little work for a full day and not enough seniority: control work is concentrated around each month-end close and a few meetings.
As a guide, a controller on a €50,000 gross salary costs the company about €66,000 a year including Social Security, before adding recruitment, workspace or turnover.
With an outsourced controller you only pay for the time you need. For example, a small business with around 100 invoices a month and a monthly follow-up meeting would have an approximate fee of €500 a month + VAT with IntoAction, plus an initial set-up of the control model. You can work out your case in the staff cost calculator.
How an outsourced controller gets started
- Diagnosis: understanding the business, its data sources and the questions management needs answered.
- Set-up: designing the management P&L, the budget and the dashboard with indicators and alerts.
- Monthly cycle: close, a report with what matters for the period, and a follow-up meeting with actions, owners and dates.
From the first close you already have a clearer view of the business. Improvements in margin and cash come as decisions are made and followed through.
If you'd like to see how it would work in your company, take a look at our management control service or tell us about your case.