Financial Positions and Organization

Typical Financial Positions

Following is a list of typical financial positions. Use it as a guideline when assessing your needs both now and for the future.

Bookkeeper — Bookkeepers are primarily responsible for accounting support functions. They record and classify transactions, complete your payroll and reconcile your bank accounts. In smaller businesses, bookkeepers often have additional responsibilities, such as the preparation of financial statements and the collection of past due accounts.

Accountant — Accountants prepare financial statements and tax returns, they audit financial records, and they develop financial plans. To save money, smaller businesses often hire accountants on a part-time basis to balance their books at the end of each accounting period. Larger businesses may require the services of a full-time accountant or accounting firm. Accountants must understand local laws, tax code, etc. as accounting rules vary by location.

Controller — The controller (sometimes called “comptroller”) is the chief accountant in a business. His job is to run the accounting department. The responsibilities of a controller include selecting and overseeing accounting methods, internal monitoring and auditing, financial reports and tax administration. Smaller businesses often combine the functions of a treasurer and a controller into one position, under the title of controller.

Treasurer — The treasurer is responsible for financial planning. Her job includes obtaining financing, managing cash, managing credits and collections, making investments, obtaining insurance, obtaining employee benefits and managing inventories.

V.P. Finance / Chief Financial Officer — The CFO directs all financial aspects of a business. Responsibilities of the CFO include designing financial control systems, keeping accounting records, financial forecasting and determining the best use of funds. In a smaller business, these functions are typically the responsibility of the owner, in conjunction with an accountant and/or a controller.

Others — In addition to those in your accounting department, you may have any number of additional positions directly involved with your company's money. These could include purchasers, cashiers, sales people, waiters/waitresses, managers who approve spending, and so forth.

Sample Organizational Structures

Following are some sample scenarios for the financial organizational structure of your business. Use them as a basis for determining the ideal financial structure for your business. Consider how you might adapt them for your specific needs now and for the future.

A common arrangement for a small business has the owner as a sort of “CFO-Treasurer” hybrid, with an internal Bookkeeper and external (outsourced) Accountant performing most of the Controller's functions.

If your business warrants it, you might bring in a chief accountant/controller, to take on a more senior position. You may also need to add additional bookkeepers and possibly even additional accountants if the workload is heavy enough.

If your business is large enough, you may also require a director of finance, a vice-president of finance, or even a chief financial officer to free up your time for other things. But remember never to let go of your finances entirely. Even if you run a corporation with a large financial department, you still need to be on top of the numbers.

On the other hand, if you need the assistance, but don't have the resources or desire to hire a financial staff, much of the work can be out sourced to bookkeeping and accounting firms. You can even outsource your entire payroll process.

Revisit Your Financial Orgnizational Structure

List the positions in your business that are responsible for handling and recording your financial transactions.

• Cashiers
• Sales people
• Managers
• Purchasers
• Bookkeepers
• Accountants
• CFO
• Treasurer
• Controller
• Other

How adequate is your current financial structure? Does it cause you any frustration?

List the financial positions that must eventually exist within your business in order to achieve your Strategic Objective.

Do these positions provide a return on investment that makes them a real value to your business?

Remember, having good financial people doesn't mean you can ignore your finances. After all, their jobs are intricately entwined with yours. Far too many businesses have failed because the owner ignored their finances for too long. This is not to suggest you must do all of your own bookkeeping. You have a business to run. But if you hire people to organize and produce your financial data, you must be able to understand and interpret that data.

What financial positions skillsets or activities will you add or outsource?

In the following example, when a sale is made, one copy of the bill goes to the controller and another goes to the sales manager. The money is then delivered to the controller, who confirms the transaction with the sales manager. In this way, the accuracy of the sale is confirmed by three different individuals; the salesperson, sales manager, and controller. After recording the transaction, the controller then deposits the money into the bank.

When the purchaser needs to make a purchase, he sends a request along with the original invoice to the controller. The controller then prepares a cheque for the owner to approve and sign. Once the cheque is signed, the controller sends it to the supplier and informs the purchaser of its delivery.

If necessary, update your company's Organizational Chart and/or Relationship Diagram.