Hiring the Right Financial Professional

ACEC News / Business Management

March 5, 2020

Hiring the Right Financial Professional

By Michael Baker

I’ve seen too many businesses launch a search for a financial professional without first focusing on the specific skills required.  Do you need someone who can generate timely and accurate financial information?  Or are you seeking a financial decision maker who can help take your company to the next level?  Maybe the solution lies somewhere in between.

What are your choices? 

Bookkeeper:  Beware of variable skill levels

A bookkeeper may have an associate’s degree or may have gained expertise through on-the-job training.  In either case, it can be a difficult position to fill because experience and ability vary widely.

Typical bookkeeper duties include:

• Record transactions, sales, orders and invoices.
• Enter payables and process checks.
• Reconcile bank accounts.
• May process payroll and prepare payroll tax returns.

In a one-person accounting department, you’ll need a “full charge” bookkeeper.  This is someone who handles all accounting needs, including preparing financial statements.

Consider administering a skills test for the job candidates. Recently, working with a client to fill a bookkeeping position, we narrowed the field to five candidates.  Following an in-office interview, we administered a skills test to all five candidates. Two were unable to complete the test and left after a few minutes;   one scored poorly; and one of the remaining two was hired.  By all accounts, she’s doing a great job. 

The take-away here?  Never rely solely on a résumé and references as a way to assess technical skills.

Bookkeeper compensation varies widely with experience and geographic region.  Salaries typically start in the range of $40,000 to $45,000.  If you want a top-notch, full charge bookkeeper you should expect to pay above $50,000.  One option is to hire someone with less experience and fill in with help from your accounting firm or from an outsourced financial services provider.

Controller:  Invest wisely and reap the rewards

A controller is charged with running the accounting department as well as producing timely and accurate financial information for management.  A controller is a degreed and trained professional who might also have earned the CPA designation.  Expect to pay $75,000 to $110,000 depending on location and experience.

The decision to hire a controller is usually based on revenues and financial complexity.  While there is no bright line, a rule of thumb is revenues in the area of $4-$5 million and above.

Typical controller duties include:

• Issue financial reports in a timely manner.
• Hire and manage accounting department personnel.
• Ensure that transactions are posted correctly.
• Maintain a system of financial controls.

Other tasks may include communicating with lenders and managing insurance and benefits.  Controllers are often responsible for managing outsourced financial functions like payroll.

A competent controller should be able to troubleshoot financials and make recommendations for improving operations.  The right person should make or save money for your business.

CFO:  Welcome to the C-suite

Companies with more than $20-$25 million in revenue often require the skill and judgment of an experienced chief financial officer (CFO).  And once you reach $75 million in revenue you may need both a CFO and a controller on your team.

The controller’s job is to accurately report what happened last month or last year, while the CFO is charged with helping to chart the company’s financial future.  It’s an important difference.

Typical CFO duties include:

• Help develop and monitor strategic business goals.
• Manage outside professionals such as accountants, lawyers and bankers.
• Negotiate and manage credit facilities.
• Oversee financial information and generate reports.

At the end of the day, the CFO is responsible for managing an organization’s financial affairs.  At an average salary of $125,000 and up, it is a significant investment.  But it’s money well spent if you can attract an experienced individual to your executive team who can help manage and monitor finances and grow the business.

Vigilance required

Regardless of the position, follow prudent, proven practices when placing someone in the financial heart of your business.

• Always call references and verify prior employment.
• Conduct a thorough background and credit check.
• If necessary, get help in your search from your accounting firm, recruiter or staffing company.
• Select a qualified financial professional you believe will be a good fit.  Every organization’s culture is unique.  You want someone who will mesh well and work productively with your team.

Mike Baker is managing partner of Dent Moses LLP, a full-service accounting and business management firm in Birmingham, Ala. He can be reached at Mbaker@dentbaker.com.

 

 

 

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