The Evolving Role Of The Controller

The CFOs right hand?


The purpose of the Controller, fundamentally, is to provide information from which the CFO can develop a financial plan for the company. They are responsible for an organization’s accounting and record keeping, and must produce timely and accurate monthly financial statements to help the CFO readily adapt to current events and the changing business environment. In essence, the Controller deals with the company’s past financial situation, while the CFO is responsible for its future.

The role of the Controller is evolving though, as many senior finance professional roles are. As such, they are working more and more with the CFO and other departments in the analysis and formulation of solutions to more strategic issues. They are also integrating with operational areas across the organization to provide financial and non-financial data, as well as providing users who work in these areas with the tools to enable self-service access to informational sources.

Evidencing this shift, a recent IMA survey found that 81% of Financial Controllers report to either the president, owner, or a C-level executive - such as the CFO. More than 30% of the controllers, meanwhile, said that they were now taking on responsibilities that were traditionally carried out by the CFO - as their role is also evolving to make them more of a business partner to the CEO. Nearly 80% of Controllers are seeing increased demand for them to apply strategic, forward-thinking skills, while three-quarters say they are utilizing their knowledge to help the business and three-quarters say they are helping to drive productivity improvements, suggesting a move away from simply keeping down costs, to actually adding value.

There are a number of factors driving this shift, most of which are having an impact on the responsibilities of employees across the Finance function. The advancement of technology is enabling the automation of more jobs that would have had to have been conducted manually before. Social connectivity through social media, the availability of data and news sources, as well as increased globalization, all means that there is far more information for the Controller to consider that now has to be fed into reports and models.

One of the primary reasons for the Controller’s increased importance within organizations is the number of new regulations that have been put into place since the financial crisis. Compliance is one of their primary responsibilities, and failures can have huge financial and reputational consequences.

In order for organizations to fully optimize the skill-set and knowledge held by the Controller, they must gain a full appreciation of how they can add value to an organization. In many firms, they are still seen purely as bean counters and historians. It is also the responsibility of the Controller to adapt to his new role. Dickson Tsang, CFO of Hong Kong-listed China Finan­cial Leasing Group, said: ‘My feeling is the role of financial controller is getting more demanding. Especially at smaller-scale listed companies, a financial controller is no longer expected to merely handle accounting issues. They have to be an all-rounder.’ Ensuring their knowledge of technology is up-to-date and that they are aware of the expectations C-suite executives have of them is necessary if they are to stay relevant and increase their standing in their firm.

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