July 20, 2018

New Industry, No Problem: How 3 Controllers Transitioned From One Sector to Another

controllers change industries

After spending several years as either an assistant corporate controller or corporate controller for three companies within the healthcare sector, Erik Bello, CPA, decided to make a career change.

In April of last year, he became corporate controller of UniFirst Corp., a uniform rental service company based in Wilmington, Mass. And even though Bello was familiar with a majority of the duties he would be required to do as controller, he wasn’t too familiar with the uniform rental service industry—but it was a risk he was willing to take. Fortunately, the job transition went as smooth as he could have hoped for, and the experience, he said, has been quite rewarding—both personally and professionally.

“Although employment transitions are never easy, the culture at UniFirst allowed me to quickly learn and understand my role—and to become part of the family,” Bello said. “Not only is this inclusive family culture found in the corporate finance area, but it is also alive and well throughout the entire company.”

From the day he first arrived at UniFirst, senior management and colleagues from different departments took the time to meet with Bello to explain and discuss the uniform rental service industry, their roles within the organization, how their duties tie into his role, and their expectations for him and his team, Bello said.

He also gained considerable knowledge of the business and the industry by spending time reading and studying financial reports and internal documentation in various areas, and visiting several of UniFirst’s field operations.

“This involved touring various servicing plant operations in our core laundry business, including one from a recent competitive acquisition, as well as our centralized distribution center in Kentucky—with the ultimate goal of discovering how all the parts of the business are tied into the overall customer experience,” Bello said.

“In addition to getting out into the field, which is something that senior management encourages every employee to do, I also attended annual budget meetings for various business units to learn about the different elements our operations need to consider to successfully run the business,” he continued.

More similarities than differences

Controllers shouldn’t let fear of entering a new industry keep them from progressing in their careers and expanding their knowledge base and depth, said Jason Page, CPA, corporate controller of Provo, Utah-based Chatbooks, a subscription-based service that automatically turns digital photos into photo books.

“You know the underlying principles, and you know how to do the research and find answers. Have confidence in yourself and enjoy the ride,” said Page, who joined Chatbooks last June after serving as controller of Backcountry.com, an online retailer that specializes in outdoor recreation gear and clothing.

Page believes there are more commonalities in the controllership across industries than there are differences. For example, the same technical accounting policies and procedures that he helped establish at Backcountry also needed to be developed at Chatbooks, such as revenue recognition, capitalization of internally developed software, leases and leasehold improvements, and stock-based compensation.

“Other similarities include common business performance metrics, such as traffic and conversion, customer cost and lifetime value, and sharing similar marketing channels, such as paid search and social, as well as a strong focus on customer experience and customer service,” he added.

Jennifer Vossler, CPA, vice president and corporate controller for Paychex, a Rochester, N.Y.-based payroll, human resources, and benefits services provider, said understanding Sarbanes-Oxley requirements, SEC reporting and disclosure rules, and technical accounting complexities are all transferable between industries.

“However, there is a learning curve involved in identifying and understanding the risk areas of a new industry or business and the complexities in the business, which drive financial results and reporting requirements,” said Vossler, a former vice president and corporate controller at eye-care company Bausch & Lomb. “In my case, Bausch & Lomb was a complex global company. Paychex is primarily U.S.-based, which does reduce risk and complexity from a controllership perspective.”

While her duties as Paychex’s controller are different than her previous responsibilities at Bausch & Lomb, those differences are driven more by the structure of the companies and finance organizations than the industry the companies are in, Vossler said.

“I have responsibility for financial planning and analysis, corporate tax, and certain treasury functions at Paychex. In my prior role, the corporate controller was focused on financial reporting, accounting, and internal controls,” she said. “Paychex has a very centralized finance function. Having all of the above functions reporting into the controller ensures that the organization has a strong understanding of what is happening in the business, which is important in ensuring that the financial statements are accurate and comprehensive, and the internal control environment is strong.”

Transition challenges

Page said the challenges of making the transition as controller of an online retail company to controller of a photo-printing startup derived more from Chatbooks being a young, emerging, high-growth private company compared to Backcountry, which was a much larger, mature company, with well-established processes and controls from having been a subsidiary of a public company.

“It was a challenge to learn and understand different business processes and company-specific nomenclature, and to work with new audit and tax firms,” he said. “We’re still working on establishing some fundamental processes and controls, including upgrading our software and tools.”

Like Bello, Page tapped the experience and expertise of Chatbooks’ executive and finance teams to learn more about the industry and the inner-workings of the business.

“They have been amazing and very helpful in sharing their knowledge base in the industry, walking me through their existing processes, and being patient with me as I learn the industry and nomenclature,” he said. “I’m also lucky to have a strong peer network, which has given me the ability to reach out to those in controller or other accounting roles in our market for knowledge and advice.”

Vossler, too, leaned on her finance team and business partners after she joined Paychex in 2009 to become more familiar with the industry and the services the company provides. She also accompanied sales representatives to understand “how they sold our services to prospects and how they leveraged referral sources.”

“The biggest challenge is just understanding the business—how it is organized, how products and services are sold and delivered, where the biggest risk areas are, and who has the authority to do what,” Vossler said.

Bello’s biggest challenge upon joining UniFirst, he said, was prioritizing his many duties as controller and determining the right documentation that he should focus on first to best understand the company’s business and industry.

“It was vital for me to narrow down all of this information and determine what is most critical for my day-to-day job so I could immediately begin contributing to and making a positive impact with the team,” he said.

More advice from those who’ve done it

So far we’ve learned that controllers shouldn’t be afraid to:

  • Take risks and make changes;
  • Take time upfront to understand the company’s industry and how it does business; and
  • Ask questions and talk to senior management and colleagues on their team and in other departments about the industry, their roles, and how that impacts their job as controller.

Here are a few other tips from Page, Bello, and Vossler to help controllers make a smooth transition from one industry to another:

1. Do your homework and ask questions during the interview process. “I was able to learn a significant amount through the job application and interview process by being inquisitive to the point that I was probably annoying,” Page said. “I learned as much as I could by using the company website and applications, and by reading articles and social media commentary about the company and the industry.”

2. Know what other companies in your industry are reporting. “From a financial reporting and accounting perspective, we review what other companies in our industry report and review their accounting disclosures to make sure we understand differences and similarities,” Vossler said.

3. Spend time in the field. “Be sure your hiring manager will support you in getting out in the field to learn the new business, even if that means traveling to multiple locations,” Bello said.

4. Create a partnership, rather than an adversarial relationship, with your auditors. “One of the most helpful resources has been talking to and working with our current audit firm, Ernst & Young, which has a well-established presence and knowledge base in the rapidly emerging ‘Silicon Slopes’ tech market in Utah,” Page said. “They’ve provided helpful interpretive guidance, as well as conferences and training, on revenue recognition and other common accounting issues specific to our growth state and industry.”

Related articles

Non-Profits Are Feeling the Pain

WSJ has a Monday piece “Once-Robust Charity Sector Hit With Mergers, Closings” (the Recession Forces Nonprofits to Consolidate) that may be found here. It tells the story of a “homeless” woman with terminal lung cancer and a charity no longer able to afford to help her out. Sad.

When one charity’s COO says “we’ve had funding cut after funding cut, and we never know when the next shoe is going to drop,” that is a bad sign.

Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits—from arts councils to food banks—are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings.

“Like in the animal kingdom, at some point, the weaker organizations will not be able to survive,” says Diana Aviv, chief executive of Independent Sector, a coalition of 600 nonprofits.

I saw that on the Discovery Channel and it wasn’t pretty.

Note: the Service says the value of your blood is not deductible as a charitable donation but cars are. As of 2005, cars are only deductible at FMV, not Blue Book. Damn you, fair value, foiled by the free market again!

Blame the Service for tightening its charitable donation rules at the worst possible time? Not sure on that one. While you’re reluctant to donate your $200 Toyota (ha) to charity because you could have claimed $2,000 under old rules, find some comfort in the fact that (alleged) terrorist “non profits” can not file for 2 years and somehow get away with it. You wonder why I advocate fixing the system from the ground up?

You can text $10 to Haiti but what about the “Economic Homeless” here in America? asks Young Money.

If this were a survey and you asked me “What do you think the IRS could do to encourage charitable donations?” I would answer “Tax breaks. It isn’t the Treasury’s job to distribute bailouts.” Yet they continue to behave as though it is their duty.

See the problem yet?

Hallelujah! Church Accounting Miracles!

I had no idea how much a minister can make but now I do. Wait a minute, this just tells me how to bypass Service rules by writing checks in the church’s name. I might totally be in the wrong line of work.

Free Church Accounting (I’m not kidding) brings us a question from “Sharon” of Corsicana, Texas:

How much money does a minister have to make in order for money to be reported?

I started my church back up after 12 years vacancy. I do not have very many members. Right now we are 3 active members and other people stop in from time to time. I do not actually receive money. Since the church is striving I use the money to pay the light bill, get the grass moved.


Answer:

According to the IRS website, “Earnings of $400 or more are subject to self-employment taxes.” (that includes qualifying ministers)

If you are a church employee, income of $108.28 or more is subject to SE tax.

It would be better for you, if you opened a checking account in the church’s name and paid expenses out of it. If that’s not possible, just make sure and keep all of the receipts that show where the church funds are going.

Fascinating! I took the preliminary “Are You a Tax-Exempt Church” quiz on their website and failed miserably so I guess I’d make an awful 501(c)(3) but that’s probably for the best.

There are ways to fail at this of course, like the Spokane, WA priest who couldn’t keep his arms and legs (and other parts) inside of the vehicle at all times, financial mismanagement in the University of North Carolina system, and JDA favorite the University of Colorado’s wild credit card user with horrible hair.

I would never imply that more regulation is the answer; I’m merely pointing out that there’s a bit of work to be done in identifying non-profit fraud. Seriously, how can one detect fraud when the core basis of fund accounting is an imbalance between “expenses” and expenditures?

The Church of Jr Deputy Accountant Scientist? I’m down.