What is a Controller in Finance? Understanding the Role and Its Importance
What is a controller in finance? This is a position, consultancy or control method that has a very broad definition, since, actually, it does not have much time in its concept.
However, when the question “What is a financial controller” comes up, several elements come to mind.
Therefore, when we refer to a financial controller, we must go to the basics of accounting and management.
Evidently, this article will be of great value for the execution of a venture, or in any case, rearrange some things in your financial life.
In the strictest sense, a financial controller must pay attention to detail and keep the big picture in mind.
The task of this performer is to ensure accuracy, but also to improve efficiency, two goals that often conflict.
Let us not forget that, despite having the best human resources, and the best product or service, none of this is of any use if there is no order in the finances.
What is a financial controller?
A financial controller is basically the main accountant of a company who is constantly and cyclically watching over the financial movements of a company or institution.
As such, they influence decision making, forecasting and budgeting at the company level, based on accounting data.
What is a financial controller?
For The Strategic CFO, a financial controller is responsible for accounting, record keeping, information technology management, insurance, sales tax reporting, federal income tax reporting, external CPA audits and human resources.
Others know it as the financial controller, in some spheres it is called an accounting inspector, and for others, a general financial supervisor.
As you will see, the functions of a financial controller vary in different ways, until you can have a broader and more accurate concept of the economic reality of the organization.
Read here: How Much Is a Business Worth With $1 Million in Sales?
Key Responsibilities of a Financial Controller
As a financial controller the responsibilities may be varied and unique in the command structure, but they always have one goal: Healthy and robust finances.
Among the responsibilities of the financial controller are:
- Oversight of general accounting.
- Creation of internal policies and expense controls
- Coordination of external tax accountants.
- Setting up bank accounts
- Ensuring receipt of payment from customers and other debtors.
- Project management and feasibility analysis.
The financial controller is more concerned with ensuring that the data recorded is accurate, timely and in accordance with the standards set by the company.
They also present policies and procedures to ensure that employees perform the correct transactions.
So far, you have understood what this role means in the company, what is a controller in finance?
Creating Internal Policies and Expense Controls
The financial controller is directly involved in the company’s accounting process and, in many cases, will be in charge of much of the day-to-day accounting.
In this sense, he is fully involved in accounting, the act of recording the company’s transaction data.
Thus, a financial controller must ensure that the data recorded is accurate, timely and in accordance with the standards set by the company.
When there is a discrepancy in the books, the controller must detect it, find out what happened and follow up with the parties involved.
In this regard, they monitor policies and procedures to ensure that employees perform the correct transactions.
In any case, the financial controller does not necessarily have to be an expert in accounting.
For that, he or she has a consulting or business background, to be more adept in matters of efficiency or financial planning.
But the financial controller “if” he must be an expert in the accounting books.
If he cannot quickly spot tax issues or balances in a general ledger, he will not be effective in his role.
Therefore, he must be able to identify the right technicians to do most of this work for him.
If you want to know more about financial issues, we invite you to read: Financial TodayLat
The key skills of a financial controller
For a financial controller to be efficient and effective in this position, to become the “hinge” of many decisions, it is vital that:
It is important that the financial controller, at a minimum, I have good data management.
Knowing how to detect that the information is up to date, to miss a detail can generate a very detrimental block fall.
Another element to be an efficient financial controller is the ability to communicate; to know how to transmit in a precise way the indications and decision making.
Thus, it involves communication within the finance team and with direct subordinates, but one area that needs to be constantly worked on is communication with the entire company.
Knowing how to be a good leader is fundamental, and to do this, functions must be delegated.
Another element is to be able to establish strategies at the right time and moment, therefore, you must be a strategist.
A key role: Expense management for financial controllers
Continuing with the key tasks of a financial controller, being able to manage the company’s expenses is a key objective.
Unnecessary expenses and outgoings are the main causes of a chaotic financial closing process.
The best practice is to have an integrated expense management system that shows you what is being spent in real time.
Instead of waiting for expense claims to come in at the end of the month.
Already with a trend measured on a day-to-day basis, you will have a definition of monthly or semi-annual spending.
Usually, an accountant closes for periods of time and only makes a report in that time frame.
However, the functions and duties of a financial controller may vary from one company to another. In this publication, we discuss the definition of a controller, their responsibilities and why they are an important part of any large financial team.
A key role: Expense management for financial controllers
Continuing with the key tasks of a financial controller, being able to manage the company’s expenses is a key objective.
Unnecessary expenses and outgoings are the main causes of a chaotic financial closing process.
The best practice is to have an integrated expense management system that shows you what is being spent in real time.
Instead of waiting for expense claims to come in at the end of the month.
Already with a trend measured on a day-to-day basis, you will have a definition of monthly or semi-annual spending.
Usually, an accountant closes for periods of time and only makes a report in that time frame.
However, the functions and duties of a financial controller may vary from one company to another.
In this publication, we discuss the definition of a controller, their responsibilities and why they are an important part of any large financial team.
Another question: Does a controller need a CPA?
A controller does not have to be a certified public accountant, but because a controller must be knowledgeable about accounting procedures, it is generally a good idea to complete CPA certification before becoming a controller.
A controller may also aspire to become a certified internal auditor, with proven expertise in conducting internal audits, or a certified financial analyst, with strong skills in accounting and economics.
Controllers are responsible for implementing and overseeing expense management strategies within their organization. This is a critical part of managing cash flow and maintaining the company’s profitability and growth.
Do you need a CMA certification? Are there others?
The CMA certification is designed to equip professionals with the skills and knowledge necessary to excel in corporate finance.
Therefore, the CMA designation demonstrates expertise in financial planning, analysis, control and decision support.
Although it would not be an obstacle, a financial controller having the certification may be a “bonus” since the CMA certification is recognized worldwide and highly valued by employers.
There are several certifications in the financial industry and it can be complicated to decide which certification to obtain.
Some of the popular certifications include certified public accountant (CPA), chartered financial analyst (CFA) and certified financial planner (CFP).
The CMA certification is unique because it focuses on corporate finance and management accounting.
The CPA certification focuses more on accounting and auditing, while the CFA certification focuses more on investment management.
The CFP certification is more focused on financial planning. The best certification to pursue will depend on your professional goals and interests.
