By Ken Keller
Dear Ken Keller,
I’m a business owner in my mid 50s, working long, hard hours to grow my business.
While I know every aspect of my business, technically, my weak spot is financial management.
I’m just not a “debit and credit” kind of guy and I never have been.
My issue is that my Controller isn’t doing the job I want done or the job I now know needs to be done.
This came to light recently when I attended a conference and learned what kind of reports and analysis other company owners in my industry were receiving from their finance department.
My fellow owners were surprised to learn that I was not getting anything close to what they use to make more informed decisions.
I was told that it only takes a few days for their monthly financial reports to be completed; mine are always several months behind (late).
The other owners explained about separation of duties within accounting and finance to prevent temptation and the likelihood of playing with the numbers.
My Controller has been with me for years and by all accounts, is loyal and hard-working. I have no reason to suspect anything but his total honesty.
I thought he was smart enough and willing to take the initiative to learn new things as the company has grown and expanded but he has not.
What are your thoughts on how to deal with this situation?
I’d say you have a very serious issue on your hands.
If I did not know better, this employee is out smarting you by playing dumb. But he is playing with your money and maybe he has been doing it for years.
And, since you have admitted that finances aren’t your strong suit, it wouldn’t take much to stay ahead of what you know and are learning to continue to keep you in the dark.
You didn’t say who you use to do your taxes but it is probably past due to bring them in for a “top to bottom” review of everything that is going on in the financial area of your company.
I would recommend a simple exercise to “follow the dollars” to find out what the current process is in your company to make sure every dollar is accounted for.
If you suspect fraud, you can bring in a Certified Fraud Examiner to perform an audit that focuses specifically on theft or opportunities for theft.
If you decide to do either action, I recommend you put your Controller on a paid vacation for at least one week, or longer, until you gain a better understanding of what has been and what has not been going on with your company’s money.
Assuming that this is merely a case of lack of ability, a longer term solution to your dilemma is to hire someone from the outside who has “been there and done that” as your Chief Financial Officer and have your current Controller report to him or her. With someone new at the helm, your frustration should soon disappear and your decision making will likely improve once you start receiving the information you need.
If financial irregularities surface in your company as a result of outside review by competent professionals, they can advise you what the next steps should be to address both personnel and processes.
Ken Keller is a syndicated business columnist focused on the leadership needs of small and midsize closely held companies. Contact him at [email protected]. Keller’s column reflects his own views and not necessarily those of this media outlet.