The role of the controller has rapidly evolved over the years. While the primary function of the controller obviously remains the issuing of financial statements that are free of material misstatements, this function alone encompasses multiple other tactical activities. However, we are finding that the controller has an increasingly strategic role to play in the overall growth of an organization. It is obvious that the controller has to grow beyond the important but basic role of governance, risk and compliance (GRC)
In conversation with Leo Ramchandani, a highly experienced finance professional having held roles such as an auditor to controller with companies like Deloitte and Macstadium along with Aleksandr Firer, a seasoned finance stalwart who is currently a corporate controller at Medrio, we were able to get plenty of insights into what makes a controller a champion or superstar since both of them are champions in our opinion.
Both agree that the main functions of a controller are to manage the financial organization such that all financial information provided is free of misstatements. Ensuring that these statements are available on time and are accurate. In order for this to be met, it is important that the main inputs around AR/AP, expenses and all the other important nitty gritties which form the bulk of the information input are fast, timely and accurately recorded.
According to Leo, a major roadblock here is lack of an integrated financial system. When probed further, Leo explained that “Ultimately the Controller is an information hub. When one has inputs coming in from different sources, the risk of errors increases. In a smaller operation, this may still be feasible, but as soon as one starts to grow, this slowly and surely becomes untenable. This directly affects the function of the Controller and ultimately the management.” Insisting on having a system that provides the entire organization with a single version of the truth is absolutely Imperative.
Aleks added further that lack of automation would be another impediment that hurts the finance function. A simple example is that of a purchase approval workflow. Imagine the time and labour hours saved when something like this is implemented via whatever system you use to save on time and money.
On a regular basis the ongoing performance of the finance organization is judged by the monthly financial close. This is important, since accurate reporting is possible only once the financial close is complete. The management and department heads reply on this data to make decisions, to validate or course correct as required. As a result financial closes have been painstakingly long and arduous to ensure accuracy. Leo happily mentions that his experience with NetSuite has allowed his previous finance organization to bring that time down from 3 weeks to 7 days to 4 days.
Furthermore, there are often occasions when the company management views the finance organization as a cost center and there is lack of budget allocation accordingly.
How then, does the Controller face these challenges and become a champion contributor to the growth of the company. Let’s start with the personal attributes. As with any leader and understandably with a finance functions some of the basic qualities are essential such as’-
Beyond this a controller has to be able to shape the finance organization as a leader who inspires his team to come to work everyday and provide the necessary guidance, tools and experience for the rest of the finance organization to be an effective well oiled machine.
Beyond these qualities, the controller also has to have the ability and more importantly the desire to” look beyond the trees at the entire forest” as Leo puts it. The ability to step away from the details and look at the larger picture which can help the management to answer the question “ Are we going in the right direction?”
Aleks put it very succinctly. “look beyond the numbers” he mentions. He further mentions that it’s important to understand if a controller is focusing his activities on helping the overall organization scale? Since the controller has first hand knowledge of the numbers, his timely communication to relevant points in the organization can lead to improvements.
The controller is also increasingly looked upon to provide strategic financial inputs to management. In order to accomplish this the modern controller needs to have access to a modern financial system that provide the tools required to near instantly provide various ratios, trend analysis and custom reporting to slice and dice available data and seemingly unrelated information into a cohesive and understandable piece of information that enables management to take informed decisions and this leads into the next point on how the controller becomes valuable to a CFO.
The CFO obviously tends to pay attention to more strategic issues rather than focus on the tactical or departmental level. The CFO relies heavily on the controller to provide the right information……the first time. This ability to have complete faith in the numbers provided by the controller is important and something most Controllers continuously stress over. The modern Controller in turn usually relies on their financial management system to ensure that their numbers are correct.
In summary, an effective modern controller would have to;-
- Create a system for recording accurate and timely financial inputs
- Streamline and manage the finance operation.
- Close the books accurately and fast (Click for more information)
- Provide timely feedback to department heads and management.
- Posses personal traits that excel in the finance function
- Be a leader.
- Think strategically – look beyond the numbers
Disclaimer: The views mentioned above are a matter of personal opinion.
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