by: Steven Haug and Evan Markgraf
An Interim Controller is a financial expert temporarily hired to manage an organization’s accounting and finance functions. Typically, this role is brought in to fill a gap left by a departing controller or to provide extra support during a period of transition, such as a merger, acquisition, or restructuring. Interim Controllers possess significant experience in financial management, making them well-equipped to oversee daily financial operations, ensure compliance, and contribute to strategic planning during their tenure.
In this article, we will discuss this critical resource, the value they can offer Private Equity, typical projects, and how to onboard them into your company. We’ll also provide advice on how you can hire an Interim Controller quickly to meet a pressing organizational need.
What is an Interim Controller?
- What Kinds of Projects Do Interim Controllers Typically Work On?
- Why Hire an Interim Controller?
- When Should I Hire an Interim Controller?
- How Can I Integrate an Interim Controller in Our Workstream?
- Why Choose an Interim Controller Over Outsourced Help?
What Kinds of Projects Do Interim Controllers Typically Work On?
Interim Controllers play a vital role in managing a diverse portfolio of high-impact projects within organizations. In the realm of financial reporting and compliance, they ensure all financial reports adhere to regulatory standards and are delivered accurately to stakeholders, maintaining transparency and accountability throughout the organization.
Sometimes referred to as the “company historian,” a controller is responsible for maintaining and interpreting the financial records of a company. A significant portion of their work involves audit preparation, where they focus on streamlining financial records and preparing comprehensive documentation for external audits, whether these are routine annual reviews or specific compliance checks. They also take charge of system transitions, overseeing crucial updates or complete overhauls of financial software while maintaining data integrity and ensuring proper training for team members who will use these systems.
In mergers and acquisitions, Interim Controllers manage the complex financial due diligence process and oversee integration efforts, ensuring smooth transitions during these critical corporate events. Their expertise in cash flow management proves invaluable as they implement detailed forecasts and establish robust budgeting processes to maintain financial stability during transitional periods.
Another key responsibility involves process improvements, where they carefully evaluate existing workflows to identify inefficiencies. They then introduce and implement industry best practices to streamline finance and accounting operations, ultimately enhancing the organization’s overall financial performance and operational efficiency.
Considering an Interim Controller? Read a case study about a successful placement here.
Why Hire an Interim Controller?
Hiring an Interim Controller can provide several advantages to a business, including:
1. Immediate Expertise
Interim Controllers bring specialized knowledge and skills, meaning they require little time to get up to speed.
2. Operational Continuity
They ensure the smooth operation of finance functions during a leadership gap or period of transition.
3. Objective Perspective
Interim Controllers, coming from outside the organization, can provide fresh insights and solutions unclouded by internal dynamics.
4. Reduced Risk
By managing critical financial functions and ensuring compliance, Interim Controllers minimize the risk of regulatory issues or disruptions.
When Should I Hire an Interim Controller?
Like other on-demand or interim hires, an Interim Controller is often brought into a portfolio company to fix a problem, put out a fire, or address another pressing need. Here are the most common scenarios in which you might consider hiring an Interim Controller:
1. Crisis Response
When organizations face the sudden departure of a Controller or CFO, an Interim Controller can step in seamlessly to maintain critical financial operations. These experienced professionals ensure business continuity and stability during potentially disruptive leadership transitions. A sudden and unexpected audit is another time many organizations decide to tap this resource as a plug-and-play solution.
2. Peak Period Management
During high-pressure periods such as year-end reporting or audit season, Interim Controllers prove invaluable. Their expertise helps teams navigate increased workloads without sacrificing accuracy, maintaining high standards even under tight deadlines. This can also be a great way to free up other critical resources to deploy them elsewhere in your organization.
Organizational Transformation
Their role becomes particularly crucial during major organizational changes – whether mergers, acquisitions, or restructuring efforts. In these scenarios, they skillfully manage complex financial integration and reporting challenges, ensuring smooth transitions during corporate evolution.
3. Technological Innovation
Beyond crisis management, Interim Controllers excel at guiding teams through technological transformations. Because controllers specialize in collecting, analyzing and consolidating financial data, many of them acquire impressive technical know-how and are intimately familiar with ERP systems, data transformation tools and other critical financial software and tools. A technically adept Interim Controller can ensure the smooth adoption of new financial software and reporting standards while maintaining operational efficiency, effectively bridging the gap between legacy systems and modern solutions.
How Can I Integrate an Interim Controller in Our Workstream?
A great integration plan is a key ingredient to quickly tapping the skills and abilities of your newest hire. This goes beyond simply providing access to your systems and creating an email. From setting clear goals to acclimating the new hire into the company culture, the following steps can help a new Interim Controller quickly get up to speed at your organization:
1. Set Clear Long-term Goals and Expectations
Define the scope of the role, priorities, and objectives from day one. If the Interim Controller is going to be expected to assist in maintaining the annual budget, for example, this needs to be established clearly at the outset. Establishing KPIs is a very effective way to not only communicate expectations but also help your new employee track their own progress.
2. Set Short-Term Goals before Day 1
Work with the Interim Controller to establish specific, achievable goals for the short term. These should address immediate needs, such as stabilizing financial reporting, closing outstanding tasks, or implementing process improvements. Short-term goals help the Interim Controller to quickly add value and gain momentum in their new role.
3. Provide Access to Key Resources
Ensure the Interim Controller has access to all relevant financial systems, records, and personnel. While this is usually a relatively simple matter, hiccups here can cause delays and increase the time it takes for the new hire to ramp up. A few minutes spent delegating each task to a clear point person can save hours of lost time down the road.
4. Communication with the Team
Introduce the Interim Controller to the team and explain their role to ease collaboration and foster a supportive environment. Don’t underestimate the value of icebreakers and building a rapport with the new hire, even if they will only be in your organization a short time. In fact, this Forbes article argues that teambuilding exercises are one of the most important business investments you can make.
5. Regular Check-Ins
Schedule regular meetings to discuss progress, challenges, and provide feedback to ensure alignment with organizational goals.
Why Choose an Interim Controller Over Outsourced Help?
An Interim Controller offers benefits that outsourced solutions may not, including:
1. Greater Control and Customization
An Interim Controller is fully integrated into the team, allowing for better alignment with organizational objectives and adaptability to the company’s specific needs.
2. On-Site Presence
They often work on-site, making them accessible to team members and better able to monitor and influence daily financial operations.
3. Deep Understanding of Company Culture
Interim Controllers are more likely to understand and adapt to the unique culture, practices, and challenges of the organization.
4. Long-Term Benefits
The process improvements and strategies an Interim Controller introduces can lead to sustainable financial practices even after their departure. For lower and middle-market portfolio companies which may not be able to afford a permanent Controller, the systems introduced by the Interim Controller can often be maintained by the rest of the team, whether that is the CFO, a fractional CFO or an accountant.
Why are Interim Controllers valuable for Private Equity PortCos?
Interim Controllers are particularly valuable for lower and middle market Private Equity portfolio companies for several strategic reasons.
- First, PE firms often acquire companies that need significant financial and operational improvements to achieve their target returns. Interim Controllers can quickly step in to assess financial operations, implement more rigorous reporting standards, and establish the sophisticated controls that PE firms expect. Unlike permanent hires, they can start immediately without a lengthy recruitment process, which is crucial during the critical post-acquisition period.
- Second, portfolio companies frequently undergo major transitions that require specialized expertise – whether it’s implementing new ERP systems, preparing for a future sale, or integrating add-on acquisitions. Interim Controllers bring deep experience from multiple similar situations, allowing them to anticipate challenges and execute solutions more effectively than someone who may have only managed such projects once or twice in their career.
- Third, Interim Controllers provide an objective, outside perspective that can be especially valuable when PE firms need to make difficult changes. As temporary resources, they’re often more willing to highlight inefficiencies, challenge existing processes, and push through necessary but potentially uncomfortable improvements without being constrained by internal politics or concerns about long-term relationships.
- Finally, they offer PE firms flexibility in their human capital strategy. An interim controller can stabilize financial operations and build proper infrastructure while the PE firm evaluates whether they need a full-time controller, a CFO, or a different configuration of the finance team for the long term. This approach helps avoid costly hiring mistakes during periods of significant change.
How to Hire an Interim Controller Quickly
Here’s a practical guide to quickly securing a qualified interim controller:
1. Define Immediate Needs & Scope
Start by clearly defining your immediate needs and project scope – whether it’s managing an audit, implementing new systems, or filling a sudden vacancy. This clarity will help streamline your search and ensure you find the right fit quickly.
2. Leverage Professional Networks
Contact a specialized staffing firm that focuses on interim executives, as they maintain a pool of pre-vetted controllers ready for immediate deployment. You can also consider reaching out to your company’s audit firm and other professional service providers, as they often have strong networks of experienced financial professionals.
3. Streamline the Evaluation Process
Keep interviews focused on specific, relevant experience that matches your urgent needs. Look for candidates who have handled similar situations and can demonstrate quick adaptation to new environments. Key questions should address their experience with your industry, ERP systems, and specific challenges they’ll need to handle.
4. Expedite Onboarding
Once you’ve selected a candidate, move quickly to finalize arrangements. Have a clear scope document ready, along with defined deliverables and timeline. Consider using a standardized consulting agreement to avoid lengthy contract negotiations. Prepare key system access, team introductions, and critical documentation in advance to enable them to hit the ground running.
Remember, while speed is important, don’t completely sacrifice due diligence – check recent references and verify crucial credentials to ensure you’re bringing in someone who can truly deliver under pressure.
At ECA, we staff interim execs and consultants within 1-2 weeks’ time. By leveraging our vast network of top talent and implementing a data-driven approach to recruiting developed by our founder, Atta Tarki, in his book Evidence Based Recruiting, we can guarantee our results and ensure the best value for our Private Equity clients and their investors.
Interested in hiring an Interim Controllers? Get in touch with us or request a salary report here.
Steven Haug is a Managing Director at ECA Partners. He can be reached at [email protected]. Evan Markgraf is a Senior Director at ECA Partners. He can be reached at [email protected].
