Bookkeeper or Financial Controller

I do a lot of research on employment and opportunities to help my clients. I think every aspect of the business has to be looked at to provide a superior service and one of those research is looking to find out what salary should my client expect to pay for a bookkeeper or a controller, depending on their needs. A thing I realized while doing my research is how confused employers are when it come to their needs between a controller and a bookkeeper. So, this blog help settle the difference between what's a bookkeeper and a controller. Every small and medium business should read this as this could save them thousands of dollars and I mean between 40K to 50K in savings a year.

So a bookkeeper is someone that compiles data from bank and credit card transactions and customer and supplier invoices to provide raw data to look at in form of a detailed financial statement. The complexity of the information is basic, they will record a transaction, make sure the numbers are accurate and they are recorded in the proper account. They may also prepare payroll, submit government remittance like payroll deductions, WSIB, CNESST, GST/HST and QST. They may also collect receivables and do admin stuff. That is a bookkeeper's role, to compile data to provide a quick overview of the company. Unless there are complex transactions, you could somewhat rely on this information. Although the information has been compiled, it doesn't mean the data is ready to be put into a financial statement to be relied upon as there is more work to do then just compiling data. The bookkeeper will be remunerate on the complexity and the amount of work this person can do, like for example, pull the necessary data to submit payroll deductions or calculate and record amortization. A bookkeeper could range between 40K to 65k depending on his experience.

On the other hand, a controller does not do any of the daily tasks of compiling data, the job of a controller is to prepare financial statements with full note disclosure using the raw data the bookkeeper compiled, create and maintain controls and policies surrounding these financial statements and make analysis and analytical procedures to ensure all the financial assertions are met. They also prepare specific reports to help executives make decision like dashboards, executive reports, analytics, costing, pricing, transfer pricing and much more. Most controllers, but not all, will also be business experts in helping companies make decisions in every branch of their company like in human resources, marketing, sales, operations, business law, income tax and management. Their job is to insure accuracy of the data so they can interpret the information to management and executives so they can make sound decisions. Some companies will even name the controller a "business partner" for their knowledge of businesses. As for his salary, a controller could range from 85k to 120k, up to 150k for publicly listed companies.

Notice earlier I said, prepare financial statements with full note disclosure? Depending on the level of assurance the company is required to provide, It may have to prepare a complete set of financial statement with notes. When the level of assurance is higher, the more complex the financial statements become. Therefore, as rule of thumb, the type of assurance the company is required to provide readers guides the decision to have a controller. If the company is required to have a compilation engagement, then there isn't really a need for a controller as the their is no complexity in preparing the financial statements. In addition, compilation engagement records most transactions using the historical cost and there is barely any notes to the financial statements to prepare. As for review engagements and audits, they have to follow rules and regulations called accounting standards like Accounting Standard for Private Enterprise (ASPE). These standards will dictate the way you record and how you present those transactions in the financial statements. The type of assurance also requires your company to have controls to prevent misstatement due to errors or fraud as the goal of these financial statements is to provide assurance to the readers that the financial statements do not contain material misstatements.

Bookkeepers don't have this type of knowledge as they don't have this type of experience and education to prepare full blown financial statements, therefore a bookkeeper will not be a good fit for this type of work. If you do select a bookkeeper to do this work, you will have to pay additional cost for accountants, CPA firms, at year end to prepare all the work that was not done. Nevertheless, there is a solution to this problem, you could hire someone to train or support the bookkeeper to prepare month ends and the financial statements so you have accurate information when reading the statements. This method cost less than having a controller in house as virtual controllers become available when required so you get to save money.

Also, if you hire a controller to do day to day activities like bookkeeping and admin stuff he will not have the time to oversee controls and prepare analytics to help guide executives make their decisions as he will be overwhelmed with day to day stuff.

To sum it up, bookkeepers do day to day stuff like recording transaction into a ledger and they submit info to different agencies to fulfil the companies obligations. As for a controller, he prepares full set of financial statements prepared using standards and he prepares analysis to ensure accuracy of the information provided. He also prepares reports to help management make decisions. So, hopefully, this will clarify some misunderstanding between bookkeepers and controllers as this can save you a lot of money.