Why Financial Controllers Fail Without Authority & How to Fix It

Introduction - Financial Controllers Fail Without Authority

Small and medium‑sized construction and engineering firms often view the financial controller as an accounting workhorse. Yet controllers are not magicians; they need authority, information and support to succeed.

When business owners delegate responsibility without equivalent authority, they set the controller up for failure. In a £5 million construction firm, a controller might be expected to reconcile accounts, manage budgets and deliver timely financial reports. Without access to senior management, the controller may focus on the wrong priorities

and miss compliance issues.

This blog explores why controllers fail, why proper authority matters for SMEs, and how to set up your finance function for success.

1 When Controllers Lack Authority

In many firms the controller is treated as a “bookkeeper with a title.” They are tasked with producing budgets, managing accounts receivable/payable, payroll and reporting but have little say in how the business operates. When expectations are unclear and access to relevant information is limited, controllers may prioritise the wrong metrics or fail to communicate risks. Lack of authority also prevents them from enforcing internal controls; errors and fraud can proliferate

Need to review

The problem is not technical competence but organisational structure. According to expert commentary, controllers often fail because of poor communication, reliance on manual processes and inadequate authority.

They cannot deliver accurate forecasts if they’re excluded from strategy meetings or if executives approve spending outside the budget. Decision‑makers often view controllers as “historical reporters,” ignoring their role in planning and risk management. Without board‑level support, controllers cannot maintain segregation of duties and independence.

Strategy

• Clarify the role and reporting line: Document the controller’s responsibilities and ensure they report to a finance director or CEO with direct access to management meetings. Add this to employment contracts and review it annually.

  
  

• Give access to information: Set up regular weekly or monthly check‑ins where project managers share pipeline, purchase orders and contract changes. Encourage transparency across departments so controllers can prepare budgets with current data.

  
  

• Delegate authority: Empower the controller to approve or reject spending requests within policy. Introduce thresholds where the controller co‑signs high‑value purchases, ensuring segregation of duties.

  
  

• Invest in automation: Replace spreadsheets with accounting software and implement real‑time dashboards. Reducing manual processes helps controllers focus on analysis.

2 Setting the Business Up for Controller Success

Research highlights that controllers face challenges like data management, conveying complex information, adopting new technologies, minimising staff attrition and leveraging process automation.

Without support, controllers become bottlenecks, leading to slow closes and poor visibility. In SMEs, the failure to invest in proper systems is often due to the misconception that robust controls are only for large enterprises.

Need to review

Controllers succeed when management recognises finance as a strategic function. Effective internal controls, such as segregation of duties, fraud prevention, and regular bank reconciliations, are essential even for small firms. When owners undervalue controls, controllers cannot implement necessary checks and balances and become reactive.

Strategy

• Right‑size the finance team: A £5 million construction firm may require a controller, accounts assistant and part‑time bookkeeper. Assess workload regularly; when managers ask the controller to perform clerical tasks, productivity suffers.

  
  

• Upgrade technology: Implement ERP or project management tools to centralise costs and integrate with payroll and vendor management. Automation reduces errors and frees the controller to focus on analysis.

  
  

• Provide training: Finance regulations evolve constantly. Support the controller with ongoing professional development and encourage them to attend industry webinars and courses.

  
  

• Promote cross‑functional collaboration: Invite controllers to project planning sessions. When they understand the operational context, they can build more accurate budgets and cash flow forecasts.

3 Recognise When Workloads Are Too Much

It’s tempting to pile extra duties onto the controller, payroll, HR, IT or even procurement. This can lead to burnout and oversights.

Expert articles list common mistakes controllers make when overwhelmed: neglecting communication, ignoring automation, poor cash‑flow management, underestimating compliance, focusing only on historical data, and overlooking risk management.

Such errors can result in inaccurate reports, fraudulent transactions and missed opportunities.

Need to review

Owners must regularly review the controller’s workload. If month‑end closes are delayed or if tasks beyond core accounting consume more than 30 % of the controller’s time, you are risking performance. The cost of hiring additional support is usually less than the financial loss from errors or fines.

Strategy

• Prioritise core responsibilities: Ensure the controller concentrates on budgeting, reporting, cash‑flow management and internal controls. Delegate ancillary tasks like AP data entry to clerical staff.

  
  

• Outsource specialised tasks: If the business requires complex tax planning or advanced forecasting, consider a fractional finance director or part‑time CFO.

  
  

• Implement standard operating procedures: Document processes for expense approval, vendor onboarding and reconciliations so that junior staff can perform them consistently.

  
  

Key Takeaways

• Controllers fail when they are responsible for the numbers but lack decision‑making authority and access to information.

• SMEs must provide clear reporting lines, empower controllers with approval authority and invest in automation.

• Train and support controllers through professional development to keep pace with changing regulations.

• Regularly review workloads; delegate clerical tasks and outsource specialised functions to prevent burnout.

A successful controller is a trusted advisor, not a “glorified bookkeeper.” By granting authority, resources and support, construction and engineering firms can transform their finance function and avoid costly failures. Explore related insights on building robust finance functions and download our free Financial Controller Checklist from our resources page.

Wrapping up today’s insights, tomorrow we simplify another accounting challenge.