Chapter 3
What Is the Contract Controller’s Job About?
It is not the contract that defines what you need to do!
Introduction
Now that we have summarized and differentiated the role of the Controller and of the CFO, let us get more specific about the job of the contractor or Hired Gun.
While there are a tremendous amount of similarities, there are some differences and the rest of the book will highlight them. Even if you decide that being a contractor or part-timer is not for you, you still will get tremendous value as we focus on the skills and attitudes that contribute to a Hired Gun’s success.
For everyone who is currently or has been a Controller, your job description (I assume you had one.. .but you know the joke about making assumptions!) defines what you accepted responsibility for. As we delve into the role that the contract Controller plays, we will start with analyzing several job descriptions for actual Controllers.
After completing this chapter you should be able to
Redefine the role you must play to benefit your client or employer.
Decide which duties you will take responsibility for.
Recognize the reasons why a company might need a contract Controller or CFO.
Understand the general role the contract professional plays.
Use the Controller’s mantle of authority for positive results.
Select a role that fits your interests.
Main Difference in Expectation of the Roles
When you are hired as the Controller in a regular situation (meaning that you are a full-time employee and not under contract) your employer gives you time to learn the job. Under normal circumstances a newly hired Controller has about 6 months to master the job and learn the business. This window is less for a simple organization and longer for a complicated business model.
Now here is the thing that shocks most people when they first become a contract Controller, which discourages some of them from pursuing this as a viable career option:
The learning curve for a contract Controller or CFO is two weeks!
When you are brought in as a consultant, the client places extreme expectations on you to have an immediate impact. In fact, several experienced contract professionals have told me that their clients expected some sort of measurable results within the first week. This is a tremendous amount of pressure to be placed on anyone.
This is mentioned as a warning to those considering becoming a contract Controller or CFO. You need to understand this seemingly unreasonable demand from your clients.
As a Hired Gun you have billed yourself as an expert in solving accounting problems. Since you have sold yourself to the client as such, the client will, in turn, expect to see immediate results from your efforts.
“The aftermath of the downsizing year coupled with today’s tight job market often leaves managers unable to cope with additional assignments, especially major strategic initiatives. The company may lack sufficient internal talent to solve a problem.”
Business Finance Magazine
Worldwide, consulting revenues top $100 billion per year with an annual 20 percent growth rate.
The Controller Job Description
Review the three job descriptions for real-life Controller positions on the following pages. They are all different, yet there are three commonalities among them.
Many of the duties are the same (although described differently).
The job of the Controller is very broad.
The written description rarely covers all the duties of the Controller.
The Point of this Exercise
The Controller’s Vacuum is a very real phenomenon and one that can undermine your effectiveness as a contract or part-time Controller. In this exercise, you were required to thoughtfully and carefully analyze the responsibilities against the objective of working at a high level.
As you quickly discovered, many of the duties or responsibilities needed revision. Most of your improvements were to get Pauline out of the daily hands-on responsibility and more focused on analysis, overview, and consultation.
Use your new awareness to develop your own Position Description for the type of engagements you are undertaking or plan to undertake.
Actual Job Description #1
GGG Corporation
Job Title: Controller
Supervisor: President
Major Responsibilities:
Manage credit and collections to ensure sufficient cash flow; develop and implement credit policies; create and maintain credit files and forms; perform credit checks and make determinations of creditworthiness; enforce terms of sale.
Project cash flow and manage disbursements accordingly.
Maintain appropriate relationships with key vendors.
Manage personnel functions; maintain personnel files; manage multi-state payroll; administer benefits such as our 401(k), Flex Plan, EAP, medical, dental, and disability insurance plans.
Ensure company is in compliance with all required tax filings (multi-state, city and federal, as well as benefit plans).
Be aware of appropriate OSHA & WISHA [Washington state’s job safety] regulations and ensure compliance.
Monitor use of company software to protect against piracy.
Be responsible for integrity of the balance sheet; prepare monthly in-house financial statements; communicate with outside accountant for annual review.
Manage relationship with bank for line of credit and provide monthly and quarterly reports as required by loan covenants.
Other duties as needed.
Actual Job Description #2
Actual Job Description #3
The Chief Financial Officer Job Description
General Definition
The Chief Financial Officer (CFO) provides both operational and programmatic support to the organization. The CFO supervises the finance unit and is the chief financial spokesperson for the organization. The CFO reports directly to the President or Chief Executive Officer (CEO) and directly assists the Chief Operating Officer (COO) on all strategic and tactical matters as they relate to budget management, cost benefit analysis, forecasting needs, and the securing of new funding.
Essential Duties and Responsibilities
The CFO’s essential duties and responsibilities include the following:
Assist in performing all tasks necessary to achieve the organization’s mission and help execute staff succession and growth plans.
Train the Finance Unit and other staff on raising awareness and knowledge of financial management matters.
Work with the President or CEO on the strategic vision, including fostering and cultivating stakeholder relationships on city, state, and national levels, as well as assisting in the development and negotiation of contracts.
Participate in developing new business; specifically, assist the CEO and COO in identifying new funding opportunities, the drafting of prospective programmatic budgets, and determining cost effectiveness of prospective service delivery.
Assess the benefits of all prospective contracts and advise the Executive Team on programmatic design and implementation matters.
Ensure adequate controls are installed and that substantiating documentation is approved and available, such that all purchases may pass independent and governmental audits.
Provide the COO with an operating budget. Work with the COO to ensure programmatic success through cost analysis support and compliance with all contractual and programmatic requirements. This includes 1) interpreting legislative and programmatic rules and regulations to ensure compliance with all federal, state, local, and contractual guidelines; 2) ensuring that all government regulations and requirements are disseminated to appropriate personnel; and 3) monitoring compliance.
Oversee the management and coordination of all fiscal reporting activities for the organization, including organizational revenue or expense and balance sheet reports, reports to funding agencies, and development and monitoring of organizational and contract or grant budgets.
Oversee all purchasing and payroll activities for staff and participants.
Develop and maintain systems of internal controls to safeguard financial assets of the organization and oversee federal awards and programs. Oversee the coordination and activities of independent auditors, ensuring all A-133 audit issues are resolved and all 403(b) compliance issues are met, and that the preparation of the annual financial statements is in accordance with U.S. GAAP and federal, state, and other required supplementary schedules and information.
Attend Board and Subcommittee meetings, including being the lead staff on the Audit or Finance Committee.
Monitor banking activities of the organization.
Ensure adequate cash flow to meet the organization’s needs.
Serve as one of the trustees, and oversee administration and financial reporting of the organization’s Savings and Retirement Plan.
Investigate cost-effective benefit plans and other fringe benefits which the organization may offer employees and potential employees, with the goal of attracting and retaining qualified individuals.
Oversee the production of monthly reports, including reconciliations with funders and pension plan requirements, as well as financial statements and cash flow projections for use by Executive management, as well as the Audit or Finance Committee and Board of Directors.
Assist in the design, implementation, and timely calculations of wage incentives, commissions, and salaries for the staff.
Oversee Accounts Payable and Accounts Receivable and ensure a disaster recovery plan is in place.
Oversee business insurance plans and health care coverage analysis.
Oversee the maintenance of the inventory of all fixed assets, including assets purchased with government funds (computers), assuring all are in accordance with federal regulations.
Required Knowledge, Skills, and Abilities
The CFO must have knowledge of
Not-for-profit accounting, in accordance with U.S. Generally Accepted Accounting Principles; OMB Circulars A-133, A-110, and A-122; TANF program regulations and compliance requirements; and appropriate Code of Federal Regulations sections.
Current trends, developments, and theories in job readiness training and adult education.
Current trends and developments in welfare reform, and the development of Welfare-to-Work programs under the DHHS TANF and other federal programs.
Issues, concerns, and barriers of employees newly entering the workforce.
Laws, regulations, and rules governing work requirements for TANF participants.
Resources of public and private social service and related agencies.
Organizational development, human resources, and program operations.
General office software, particularly the Microsoft Office Suite and MIP software (or other similar not-for-profit general ledger software), and use of databases.
The CFO must have the ability to
Foster and cultivate business opportunities and partnerships.
Create and assess financial statements and budget documents.
Recognize and be responsive to the needs of all clients of the organization, including funding organizations, the Board of Directors, local community advocates, participants, and employers.
Supervise staff, including regular progress reviews and plans for improvement.
Communicate effectively in both written and verbal form.
Education and Experience
EDUCATION
Completion of a bachelor’s degree at an accredited college or university, or equivalent work experience
Completion of a master’s degree at an accredited college or university, or equivalent work experience
Certified Public Accountant (CPA) preferred
EXPERIENCE
The Controller or Chief Financial Officer level
Five to seven years of financial experience and management experience with the day-today financial operations of an organization of at least 50 staff persons.
Two years of direct service delivery experience working with long-term unemployed adults.
Any equivalent combination of education and experience determined to be acceptable.
The Need for a Contract Controller or CFO
Companies in transition are the usual customers for a contract Controller or CFO.
While there is no written definition of what a contract financial executive is, it is accepted that this is a person who is hired to fill the role of Controller or CFO but is not a regular employee.
This person could be
A CPA firm employee out on loan.
An experienced Controller in between jobs.
An independent contractor.
An employee of a temporary or outsourcing agency.
A person who has a business as a consulting Controller for several companies.
A specialist in IPOs, mergers, systems, recapitalizations, or specific industry.
Whatever forms this relationship takes, there are four clear conditions:
The person is filling a pressing and urgent need.
The company has a reason for not making the position permanent.
The company needs the person to have a positive and quick impact.
The duration of the job is limited.
Most Common Reasons a Company Employs a Contract Financial Executive
The most common reasons a company employs a contract financial executive include:
They lack the funding.
Rapidly changing business conditions.
The company does not see the need.
The incumbent is out on leave.
The company is in transition or flux.
The company needs a high-level employee for a short-term project.
The company is undecided about the position in its long-term strategy.
The Role of the Contract Controller
Whatever the reason, condition, or structure, one thing is very clear and needs to be understood by the person filling the role of contract Controller:
The company has a problem and is looking for you to solve it!
This puts tremendous pressure on the Controller because:
You are very visible and expected to produce quick results!
This was not something that I was expecting when I initially became a Controller.
Positional Power
In my first tenure as a Controller, I served as the Controller of a small family business. Sometime, within the first 90 days, an employee asked for my opinion about an existing company policy. Being an opinionated sort of fellow, I shared my view. The next day, the word was out about “Ron’s new policy.” I was surprised by this outcome and I surely was not paying attention.
Several months later, again I was asked my opinion about something that was not an official policy. Of course, I expressed my thoughts. By the next day, “Ron’s new policy” was instituted. This time I paid attention!
Controllers and CFOs carry a mantle of leadership authority. My opinion carried the weight of official policy, which I failed to realize the first time I expressed it. After the second incident, I became very careful about expressing my thoughts in informal settings regarding what the company should and should not do. Being a small business, most of our policies were more of a procedure or custom than an official written document.
There is nothing wrong with sharing an opinion as an employee. However, the mantle of authority we are given has a significant impact on other employees. Coming from public accounting where the partners made all the rules, it never occurred to me that I would be thrust into the rule-making responsibility as their first Controller.
Since 1988, whenever I share this story with other Controllers, I get at least one person who tells me they had a similar experience. So I take some comfort in knowing that I am not the only one who failed to realize the visibility and power the Controller has in an organization.
Whether you are a Controller in a part-time, full-time, or contract capacity you too will be carefully observed by every employee. With non-executive employees, each of your actions and decisions carry a lot more weight than you realize.
Realize it. Accept it. Capitalize on this critical visibility and authority!
Valuing and Choosing the Appropriate Role for You
Varying Roles of the Hired Gun
As a Hired Gun, you can either choose the role that brings out the best in you or let the client define a role for you. In table 3-1, you can see that there are multiple levels within each role that the contract CFO and contract Controller can play.
Take the time to study table 3-1 and see which one matches what you want to accomplish as a contractor or part-timer. Please pay attention to how much the rates vary in each role.
Table 3-1: Comparison of the Varying Roles of the Contract CFO and Contract Controller
| Contract CFO | ||
| Role | Description | Hourly Rates* |
| Owner Advisor | Works closely with the organization’s owner(s) and becomes their personal counselor. Seeks external financing for growth, recapitalization, or planned IPO. | $100 - $150 |
| Strategist | Assists in establishing overall strategy that the firm must take to be successful. This role is required in small companies that have absentee leadership, or where the owners lack ability to think and act strategically. | $100 - $150 |
| Compliance Officer | Serves as the bad cop in the organization, where no one else serves that purpose. | $75 - $100 |
| Contract Controller | ||
| Role | Description | Hourly Rates |
| Chief Operating Officer Controller | Assists in non-traditional matters and serves as a key member of leadership team. Usually found in small organizations. | $100 - $200 |
| Financial or Acting CFO Controller | Operates as CFO, in addition to administrating typical accounting functions. | $75 - $100 |
| Operational Controller | Helps manage the organization, in addition to administrating accounting functions. This role is required in a small company with absentee leadership or an owner with limited leadership role. | $50 - $75 |
| Accounting Controller | Does bookkeeping and accounting grunt work. Often found in large organizations. | $25 - $50 |
* The hourly rates are for comparison only. The rates do not constitute the amount that you could expect to be paid, because each engagement and situation is different. The rates do, however, indicate the typical value that a hiring organization places on the specific role they ask the Hired Gun to play.
Conclusion
Not every organization has a need for a Controller or CFO to work under contractor status. Those that do need someone to be very effective during a time of extreme transition. As a contractor, not only will you wear the mantle of authority granted to a permanent employee, but you will be expected to fulfill all those responsibilities, as well.
Unless you want to work long days and nights, it is wise for you to avoid getting sucked into the Controller’s Vacuum. The best way to avoid this phenomenon is to proactively take charge of the responsibilities that you choose to undertake, and find ways to delegate or distribute those that pull you into the vacuum.
In chapter 5, you will be shown the specific tool which will help you avoid a contractor’s nightmare of working 50 hours per week, while only getting paid for 25.
Successful consulting projects are goal-oriented, narrowly defined, limited in duration, and contain standards of accountability.
For the client, hiring a contract professional can be a cost effective alternative to hiring a fulltime staff.