What Is a financial controller responsibilities?

What Is a Financial Controller? Some Facts & Responsibilities

Dermaskinsolution.com – At the beginning of this article, I briefly touched on the job duties that a financial controller responsibilities must perform. That is because most people do not understand what makes a financial controller unique. To sum it up in simple terms, they are trained to be both comptrollers and controllers.

What is a financial controller?

A financial controller is a senior manager who oversees the day-to-day financial operations of a business. Sometimes referred to as a “corporate historian”, the financial controller directs the accounting function and is responsible for the company’s books and records.

The role of the financial controller varies depending on the company’s size. In small businesses, controllers, whether in-house or outsourced, mainly deal with detailed accounting tasks beyond corporate accountants’ scope. In mid-sized companies – where responsibilities are broadest – financial controller functions are likely to include project management, technology, insurance, and compliance. In larger companies, financial controllers work with chief financial officers (CFOs), chief accounting officers (CAOs), chief financial officers, and treasurers to control the financial and administrative functions.

Key points to remember

  • Financial controllers are senior managers who oversee the day-to-day financial operations of a business.
  • As a company’s senior accountants, financial controllers have the training, experience, and license in finance, accounting, or economics.
  • Most of a controller’s time is spent on traditional tasks such as closing accounts and regulatory compliance while supporting corporate strategy and working with the CFO.
  • To be successful, a controller must stay current with fintech.

 

Understanding Financial Controllers

In the simplest terms, financial controllers are senior managers responsible for producing accurate books and records for a business. To do this, they must understand business operations and the underlying relationships between inputs, outputs, and the processes that support them. The role of a financial controller begins with being the “numbers person” and extends to creating reports and analyzes that help strategic business decisions.

The mindset of the financial controller is focused on precision, management, politics, and ethics. It is sometimes a thankless job. More often, controllers derive extreme satisfaction from building the data that guides strategic decision-making, even though they feel challenged by the lack of resources. A recent study by the Institute of Management Accountants (IMA) highlights a gap in this area: Financial controllers think they spend too much time on stewardship at the expense of strategy.

Why are financial controllers necessary?

The function of a financial controller’s responsibilities is a highly technical role; practitioners must be both experts in all areas of accounting and compliance and engaging leaders who inspire the entire organization to follow policies and procedures.

This combination of technical and soft skills makes financial controllers crucial to businesses.

A high level of pride in owning the accuracy and timeliness of the company’s books, combined with a four-star ethic, are necessary characteristics of successful controllers. In other words, the financial data they produce must be accurate – and they will stop at nothing to ensure it is – because senior executives need to trust them. Crucial business decisions will be made based on this data.

What is the difference between a CFO and a Controller?

The size of a company influences the roles of financial controller and chief financial officer. In small businesses with a CEO and a financial controller, these leaders share responsibility for all facets of the company’s financial processes.

Financial controller responsibilities and directors of the same company begin to have a separation of duties when the turnover reaches 35 to 50 million dollars or when the company considers complex transactions in the financial markets. In this case, the CFO typically takes on an outward-facing role, working with capital markets, mergers and acquisitions. At the same time, the financial controllers deal with the internal processes of producing accurate and reasonable.

Another difference between CFO and Financial Controller is that CFO’s responsibilities cover all financial activities, such as budget forecasting, treasury, and working with investors and the board of directors. At the same time, Financial Controller focuses on ledgers, internal controls, systems, and expense management.

When does a company need a management controller?

As a small business grows, its owner may begin to spend too much time working on the books rather than conducting business. Often, an accountant or bookkeeper is already on board or under contract. Still, that person needs help to meet the financial data needs of the business owner and outside stakeholders.

Here are three common scenarios that lead a company to hire its first controller:

  • Growth: When a business outstrips its accountants’ capacity or available time, it’s time to hire a controller. A financial controller helps a growing business execute complex accounting transactions, reduces the time it takes to close accounts, and enforces internal controls and company policies. This is not to devalue accountants, but financial controllers have the education, training, and experience to perform functions such as liaising with external auditors and tax professionals and protecting against fraud.
  • Revenue: Typically, companies with income over $5 million are ready for a financial controller and need their expertise.
  • GAAP compliance: Regardless of the size of the turnover, most financial controllers are hired when a company needs to produce GAAP-compliant financial statements to meet the requirements of bankers or investors or, in the case of a startup, venture capitalists.

Skills required for financial controllers

Successful financial controllers see the economic forest and all the trees within it. They work at a detailed level, understanding every nuance of the accounting process and transactional data from the general ledger, financial statements, and compliance documents. At the same time, they must be strategic thinkers who help the company achieve its short and long-term goals. These skills may seem contradictory, so they usually need to be honed over many years of experience – a typical requirement for most financial controllers.

Of course, a sense of numbers and business relationships is also essential asset.

In addition, financial controllers must possess excellent communication and interpersonal skills. The financial controller is the face of the accounting function for other departments of the company, educates non-financial people, and enforces company policies in a spirit of collaboration rather than confrontation. These skills also enhance his ability to recruit and manage productive and well-managed teams.

Does a financial controller need a CPA?

There is no regulatory requirement that a financial controller responsibilities must be a certified public accountant; however, earning a CPA certification is the most common way to master the accounting understanding required for the position. CPA certification comes with a rigorous education, examination, practical experience criteria for initial licensing, and an annual continuing professional development (CPD) requirement.

The CPA curriculum focuses on accounting, business law, taxation, and auditing. Other certifications commonly used by financial controllers are Certified Management Accountant (CMA), Certified Financial Analyst (CFA), and Certified Financial Controller (CFC).

Is the financial controller a management position?

Traditionally, the financial controller has held a management position in small businesses since it is probably the most senior financial position. As companies increase in size, the controller may be a senior executive who reports to the CFO or CEO.

Modern financial controllers are often tasked with being strategists and catalysts for progress within their businesses. According to recent studies, this is slowly moving them away from traditional functions, such as closing accounts and complying with accounting standards. Increasingly, financial controllers are being asked to come out of their “numbers box” and engage in strategic discussions. Financial controllers whose departments are under-resourced or whose economic systems are inadequate may struggle to meet this challenge.

What does a financial controller do?

Most of a financial controller’s job falls into one of four categories that the IMA calls the “four faces of comptrollership.” These are Stewardship, Operator, Enabler, and Strategy.

Of these categories, stewardship, and operator take up most of a financial controller’s time, while the enabler and strategy functions account for about 30% of their time together. The responsibilities of each “face” are as follows:

  • Stewardship: Protecting and conserving company resources and accurately reporting its financial condition.
  • Operator: Effectively manage the financial organization.
  • Enabler: Provides the correct information at the right time to support business execution.
  • Strategy: Helps leaders move the company toward its mission and goals through financial insights and analysis.

This bar approximates how a controller’s time is distributed among these four categories.

What are the functions of a financial controller?

Their primary financial controller responsibilities are to close the company’s accounts accurately, quickly, and efficiently. Ultimately, they provide general accounting oversight and are responsible for the immediate financial process.

This process includes many tasks, which can vary from company to company, but generally include the following:

  • Invoice Approval: Ensure invoices are appropriately approved and coded in the general ledger.
  • Cash flow management: Controlling and balancing cash flows in and out of business to meet obligations and optimize investments.
  • Liaison with audits: Coordination with external financial, compliance, and tax auditors.
  • Internal Controls: Create and monitor company policies and internal controls, especially expense controls, to protect company assets and reduce fraud.
  • Budget: Assist or entirely create the budget, including integrating historical data.
  • Debt Management: Manage loan agreements for company borrowings and collect monies owed to the company by customers.
  • Financial Strategy: Develop a financial strategy, including risk minimization plans and opportunity forecasting.
  • Compliance: Ensure compliance with local laws, tax provisions, and relevant industry and financial regulations.
  • Reporting and Analysis: Provide financial reporting and analysis to guide decision-making.
  • Cost Reduction: Identify efficiencies and cost reduction opportunities across the business.
  • Leadership: Coaching and managing accounting and finance staff.
  • Payroll: Payroll processing and labor tax compliance.
  • External Reporting: Preparation of corporate tax and financial filings, including public filings with the Securities and Exchange Commission (SEC).
  • Banking services: Setting up bank accounts and managing banking relationships.
  • Stakeholder Management: Advise business leaders on operational activities based on knowledge of the underlying business.

Three steps to becoming a financial controller

According to the US Bureau of Labor, the job outlook for financial controllers is bright, and growth is expected to outpace the overall average for all occupations. For those interested in this career, there are many ways to become a financial controller.

The critical steps to becoming a financial controller are:

  • Obtain one or more relevant university degrees: Obtain a bachelor’s degree specializing in accounting, finance, or business administration. If you want to get a CPA license, most states require at least 30 more credits than most bachelor’s degrees. More and more, companies need a master’s degree for their controllers.
  • Gain professional experience: Most controllers have five to ten years of experience in finance functions. The most common progression is to accountant or cost accountant, then accounting manager, assistant controller, and finally, controller. Professional experience in public accounting is often considered a vital asset, especially in one of the big four firms.
  • Obtain a license to practice: Complete the requirements for obtaining professional consent, such as CPA, CMA, CFA, or CFC. Traditionally, the CPA license is considered the gold standard. It’s also essential to complete the continuing professional education necessary to maintain support in good standing and stay current in the industry.

Studies show that nearly 50% of controllers hope to one day become CFOs, but half consider financial control the pinnacle of their careers.

Tools for financial controllers

There was a time when financial controller responsibilities were supposed to be spreadsheet wizards. Accounting and financial software have evolved, and they are now expected to be experts in their company’s economic systems. Often, financial controllers lead the selection of these systems and are the primary business owner once they are implemented. Consequently, financial controllers are heavy users of the following tools:

  • Financial and accounting systems: This is the core technology for financial controllers – the “books” include the general ledger, sub-ledgers, journal entries, and an asset register, among others.
  • Global consolidation software: These systems merge the individual finances of different divisions and business units, including those geographically dispersed.
  • Financial reporting solutions: Financial reporting tools generate company financial statements and support modeling and analysis.
  • Inventory, payroll, billing, and compliance systems: Financial controllers need access to some aspects of these systems, although they usually only oversee some.

Technology is an essential tool to carry out the “control” aspects of the controller’s job. Additionally, leveraging technology, especially emerging technologies such as robotic process automation, in-memory computing, and machine learning, can make it easier for controllers to balance traditional responsibilities. And strategic. A financial controller is likely to have multiple browser tabs open at all times, including an automated dashboard, an enterprise resource planning (ERP) system — and, of course, modern accounting software.

financial controller responsibilities are a company’s primary accountants, responsible for the company’s books and records and for providing accurate and timely financial information. They are well-educated and experienced professionals who are most successful when they have excellent “soft skills” for managing their teams and collaborating within the company.

The role of financial controller is evolving to become more strategic, with these professionals working hand-in-hand with senior management. In addition, financial controllers are increasingly involved in their company’s technology decisions, which affect their most essential tools.

Frequently asked questions about the financial controller

  • What are the duties of a financial controller?

Financial controllers are primarily responsible for the accuracy and timeliness of company records by managing the accounting function. This includes managing the immediate financial process and preparing financial statements and reports as a basis for decision-making.

  • Is the financial controller superior to the finance director?

CFO is a title that encompasses many different roles within an organization. Most of the time, these responsibilities are limited and can therefore be considered less than that of a financial controller who has overall responsibility for the accounting process. In cases where the CFO works closely with a CFO, the CFO position may be higher than the CFO position.

  • What is the Salary of a Financial Controller?

Financial controller salaries depend on the size of the company, the industry, whether the company is public or private, the number of employees overseen, and the location of the position. According to various studies, the average annual salary is between 90,000 and 110,000 US dollars.