A financial controller’s roles and duties can vary from company to company. This post discusses the definition of a controller, their responsibilities, and why they’re an important part of any large financial team.
Highlights
- A financial controller oversees a company’s financial reporting, management, and high-level accounting. They typically have a staff of accountants that report to them.
- A controller must be an effective leader, communicator, and strategist in order to help the organization make smarter financial decisions.
- There is no hard and fast rule dictating when your company needs a controller, but you might want to consider hiring one if your company has reached $5 million in revenue.
Financial controller job description
A financial controller is a person responsible for overseeing an organization’s financial reporting and management. They are typically responsible for high-level accounting, the management of internal controls, and the implementation of financial policies and procedures. A financial controller, often just called a controller, may also play a role in budgeting, forecasting, and payroll. Their financial analysis can also assist with decision making within a business.
Financial controller responsibilities
So, what does a financial controller do? They tend to wear many hats, and their role can vary from company to company, so the answer is not always straightforward.
Their position might include the following responsibilities:
- Managing an accounting staff
- Monitoring internal controls
- Managing cash flow and spending
- Working with external auditing staff
- Preparing budgets
- Identifying ways to minimize risk
- Developing financial forecasts and strategies
- Keeping the company up to date on financial reporting practices
- Identifying ways to reduce expenses
- Overseeing the month-end close
The four roles of a financial controller
Why are financial controllers important? Because they play so many roles within an organization. As the Institute of Management Accountants and Deloitte Development LLC describe, there are four main roles of a financial controller. They are stewardship, being an operator, acting as a catalyst, and developing financial strategies.
Stewardship: All controllers must make sure the resources of an organization are used responsibly and efficiently.
Operator: A controller is considered an operator because they are responsible for the management of the company’s financial operations.
Catalyst: It’s important for a controller to identify and seize opportunities for improving the organization’s financial performance.
Strategy: By analyzing past financial performance, identifying trends and patterns, and forecasting, a good controller can develop insights to inform strategic decisions.
How to be an effective controller
Effective controllers need strong skills in:
- Leadership
- Analytical thinking
- Communication
Leadership comes into play every day for this role, because this person is the head of a team that needs to work together efficiently.
Analytical thinking is critical for a role that involves solving complex problems and influencing the financial future of a company.
Communication makes all the difference. A controller must direct their staff and coordinate with leaders across teams in a clear, effective way.
What qualifications do you need to be a financial controller?
Most companies look for a controller with a bachelor’s degree in subjects such as accounting, finance, or a related field. They may even seek candidates with a master’s degree in finance or business administration.
It’s also a good idea to have at least five years of accounting or finance experience before making the move to controller.
Does a controller need a CPA?
A controller does not have to be a certified public accountant, but because a controller needs to be knowledgeable about accounting procedures, it’s generally a good idea to complete CPA certification before becoming a controller.
A controller may also seek to become a Certified Internal Auditor, with proven knowledge of completing internal audits, or a Chartered Financial Analyst, with strong skills in accounting and economics.
Spend management for financial controllers
Controllers are responsible for implementing and overseeing spend management strategies within their organization. This is a critical part of managing cash flow and keeping the business profitable and growing.
They may use spend management software to automate and streamline the process. The right software can increase visibility into spend, keep track of all receipts, and even automate expense reports. This means there are no surprises at the end of the month, and it’s easier to track spend, stick to budgets, and plan ahead.
When to hire a controller
A company may need a financial controller when it reaches a certain size. As a business grows, its financial transactions increase and its operations become more complex, to the point where a small accounting team can no longer handle the company finances alone.
In addition, demanding projects such as mergers, acquisitions, and expansions into new markets may require a controller to help make the financial processes run smoothly.
Some companies choose to include a controller once they become publicly traded and need to comply with generally accepted accounting principles (GAAP). A controller can help make sure the company is fully compliant with these rules.
Your revenue might also help determine whether a controller is needed. Some sources suggest that once your company hits $5 million in revenue, it’s time to bring on a controller.
Ultimately, there is no single answer to when a company should hire a controller—it depends on the needs of the business over time.
Controller vs. CFO
In some businesses, a Chief Financial Officer (CFO) and a controller are the same person, but in other cases they will have separate roles.
One important difference is that generally, a CFO doesn’t have to be an expert in accounting, but a controller does. A controller has to be more involved in day-to-day financial operations of an organization, possibly including the preparation of financial statements and the implementation of financial policies and procedures.
A CFO, on the other hand, is a higher-level position that is responsible for larger overall financial strategies and direction. They are the executive leader of the finance team and often report directly to the CEO. In addition, they are also often responsible for relationships with investors and other external stakeholders.
Controller vs. Accountant
While controllers are very involved in accounting, there is still a big difference between these two roles.
Accountants’ primarily work to record financial data efficiently and accurately. This can include preparing financial statements, preparing and filing tax returns, and reconciling bank statements.
A controller should also have a strong accounting background, but they focus more on big-picture projects, such as implementing financial policies and procedures and creating expense policies. They also play a role in budgeting and forecasting.
Both accountants and controllers are involved in the process of closing the books.
Keep your business finances in check
Whether you’re a controller at a mid-sized company or a business owner with 20 employees, BILL can help you increase visibility into spending and automate your expense reports.