financial controller

What is a Financial Controller?

What is a controller in accounting?

A controller serves as the head of the accounting and finance departments, managing the accounts payable and receivable teams. The controller will generally answer directly to the CFO, serving as their right hand. However, in companies that do not have a CFO, the controller will fulfill many of the CFO’s responsibilities.

A qualified controller usually holds a bachelor’s degree in accounting, finance or business administration. As well as a Certified Public Accountant (CPA) or Certified Master Accountant (CMA) certification. They should have ten years of experience in accounting and finance. This is progressively more responsibility at a major company or responsibility for a division of a corporation.

What do they do in business?

Business controllers are responsible for overseeing the day-to-day transactions of an accounting and finance department. A controller’s responsibilities fall into four basic categories: management, reporting, transactions, and compliance.

Management

A controller is responsible for managing several facets of the accounting and finance divisions of a company. They set policies and procedures that dictate how the departments operate to keep the company running smoothly. The controller also selects the accounting software the company will use. They also set financial success benchmarks for the accounting and finance staff as well as the executive team.

The company’s controller also oversees the accounting and finance departments in any subsidiaries the company owns. They’ll manage the control systems, transaction processing and maintain a staff and management team in both the corporate office and the other branches.

Reporting

Financial statements, annual reports, bank reconciliation statements, budgets, budget-to-actuals and other financial reporting are all overseen by the controller. These reports are done on behalf of the CFO. They are reported to the board of directors, the other members of the executive team and any potential investors. These reports also play a role in contract negotiations and pricing decisions.

Transactions

A company’s controller oversees their accounts payable and accounts receivable departments. Generally, the controller also processes payroll, or directly oversees the payroll process. Controllers maintain the company’s general ledger, filing system and control system. Because of these duties, they ensure that client account payments are being processed on time. They focus on any debts the company owes each month.

Compliance

In publicly held companies, controllers are often asked to complete the Securities Exchange Commission (SEC) filings on behalf of the CFO to ensure constant SEC compliance. They also provide documentation to external auditors to help ease the auditing process. The controller also ensures that the accounting and finance departments are compliant with Generally Accepted Accounting Principles (GAAP) as well as state, local and federal tax filings and compliance regulations.

When does a company need a controller?

Companies don’t always need a controller, though a controller is an important part of an accounting and finance department. Controllers focus on the past and present of a company to ensure that the company’s future has a solid foundation to build on. There are a few common reasons companies seek out a controller.

Rapid Growth

In periods of rapid growth, the accounting and finance departments of a company need an extra boost. Usually this means new accounting software to accommodate the new traffic. It generally also means a bigger accounting and finance staff, more regulations to keep track of and a large increase in inventory and receivables. In order to stay on top of all these changes, many companies opt to hire a financial controller, even on a part-time basis.

Financial Decision-making

When it’s time for the executive team and CFO to make decisions about the company’s future, a controller can step in and work closely with the CFO to ensure that the company’s budgets, financial statements and equity can support their strategies and scaling plans. Controllers make sure that the company’s past decisions and records are in keeping with the company’s future aspirations.

Accounting and Finance Staff Growth

At some companies, non-accounting staff is spending their time doing accounting tasks when they would rather be focusing on other aspects of the company’s growth or business plan. This means hiring more accounting and finance staff members to accommodate the tasks. As a company’s accounting and finance staff grows, so does their need for a controller. The financial controller will delegate and oversee the new staff.  Ensuring that everything gets done quickly and efficiently as the department grows.

Taxes and Public Filings

Companies that don’t have a financial controller already may opt to hire a part-time controller level consultant. Usually when SEC compliance filings are due, during tax season or while compiling federal, state and local compliance regulation filings. Your part-time controller would have experience filing that paperwork and ensuring that the company remains compliant with any applicable regulations throughout the year.

Accounts Payable and Accounts Receivable Management

Growing companies often find themselves with large amounts of inventory and receivables, a new influx of invoices and client accounts to keep track of and larger budget expenses to allow for. Additional accounts payable and accounts receivable oversight is necessary to keep the accounting and finance departments running smoothly while still accommodating the company’s new needs.

Is a financial controller right for your company?

Controllers are adept at maintaining a company’s day-to-day operations, making them a great resource for your company. If you’re not sure whether controller services would be right for you, a corporate finance consulting service can provide you with an expert consultant to serve as a part-time controller at your company during tax season or on a trial basis.

Many consulting services will have a buy-out option available to their clients. If your part-time controller consultant is the right fit for your company, you can keep your business controller at your company full-time to take care of all the needs of your accounting and finance department. They may also maintain a placements department to help you find the right controller for your company’s culture and goals.

What is a financial controller? They are the financial experts that will make sure your company’s dreams can come true.

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