Financial Controller

A financial controller is a senior-management-level executive who looks after an organization's accounting and financial functions. The person reports to the firm's Chief Finance Officer (CFO). While in big firms, a CFO and financial controller's positions are held by two different people, the responsibilities are fulfilled by the same person in a small business venture.

A financial controller is accountable for the economic issues arising out of inaccurate information filled in the financial documents that a company produces. As a result, they need to be cautious enough with the recordkeeping activities, ensuring utmost accuracy. These documents are then used by the internal and external shareholders to help them make more informed and wiser business decisions.

• A financial controller is a senior-level manager or executive who manages all minor and major finance and accounting functions and activities.
• From ensuring the financial reports are as per the regulatory standards to deciding how much a company should spend on what, they oversee every aspect of the organization.
• To become a controller, one must have a bachelor's degree in finance, accounting, or business-related subjects and a minimum of 10 years of experience in the field.
• The controllers are the creator, strategist, supervisor, operator, reviewer, and catalyst for the organization they work.

A financial controller takes care of an organization's basic and advanced financial activities. The person in charge plays a vital role in ensuring the records' accuracy is maintained. Controllers in a corporate firm are hired to enhance the reliability of a business.

As a business grows, the cash inflows and outflows are more frequent. Hence, depending on bookkeepers for accurate records might be risky. Hiring a controller to track the frequent transactions and check the records for correctness becomes mandatory. These individuals ensure a company's financial documents are up to the mark and reliable for auditors to validate and stakeholders to go through before making major decisions.

When a company records a revenue of over $5 million, it is expected to have a financial controller to control and supervise all basic and advanced financial activities. The controllers are well aware of the generally accepted accounting principles (GAAP) standards. Hence, they make sure the financial statements generated by the companies meet the requirements of investors and other stakeholders. 

The controllers participate in all kinds of business activities involving financial expenditure. Besides the financial responsibilities handled, they also take care of the insurance, information technology, sales tax reporting, federal income tax reporting, human resources, and other functions. In addition, these professionals also ensure managing the internal controls so that the financial affairs are properly recorded and presented for further decision making of the internal and external stakeholders of the organizations.

For operating as a full-fledge financial controller, a person must possess certain skills and qualifications. One must acquire a bachelor's degree in either accounting or business administration or accounting and possess a minimum of 10 years of experience in accounting and finance. However, holding a master's degree is not mandatory, though preferred, for anyone to become a controller. 

In addition, career seekers aspiring to hold this position may opt for professional certifications, like Certified Public Accountant (CPA), for a valid license.

When there is a controller in an organization, the person tends to play various roles. The financial controller jobs involve everything from making multiple corrective measures to performing as an operator and strategist for the company. They conduct the company's financial analysis using the different parameters and give their opinion on the same to the management for further action. These professionals guide managers and executives to perform different financial activities in the organization to strengthen the base of the company's future financial activities.

The controllers measure the variance between the actual performance of the company and the set standard performance with the help of the various available tools. After identifying the deviations, they take appropriate steps to correct them.

In addition, they help maintain a sufficient level of capital so that neither the funds should lie idle nor there is any undercapitalization of funds. They work to increase the company's productivity and efficiency, thereby helping its financial strength to grow. The controller, as a reviewer, keeps a check on all financial documents and statements being generated in the consecutive fiscal years to establish proper financial control in the company and execute the same appropriately.

From the roles that the controller plays, their duties are quite clear. However, a set of financial controller responsibilities make their presence mandatory for any organization. Let us have a look at some of them:

• The controllers keep track of all financial activities. They keep a check on all the documents generated by the finance and accounting department.
• These professionals create internal policies and budgetary requirements. As a result, the organizations know how much to spend on what.
• Fulfilling tax responsibilities is one of the major functions of a controller. This amount collected is the revenue for an economy. The controller, therefore, ensures undertaking this task with utmost efficiency.
• No matter which department of the organization it is, the controllers deal with anything requiring financial resources. 
• The controllers ensure the organizations they work in remains financially stable and strengthened. Thus, they manage capital and funds for the company.
• These professionals draft financial statements and reports according to accuracy standards to present them to internal and external stakeholders and auditors.

Let us consider the following example to understand the concept well:

A small-scale company appoints Robert as the financial controller, acting as the chief accounts officer. He has ten years of experience in accounting and finance, and he is a Certified Public Accountant (CPA). 

As a controller, he is expected to manage all the finance and accounting functions, including generating income statements, cash flow statements, framing accounting policies, deciding the budget, etc. The company assigns him tasks to distribute among an allotted team of 10 executives. Robert joins the office and undertakes all tasks. He begins monitoring the company's financial statements as prepared and other duties allocated to him.

Investors then use these financial statements to decide whether to invest in the company's assets, and auditors utilize them to check and validate the cash inflows and outflows of the organization. In addition, he ensures getting timely information from those departments so that his department's work runs smoothly.

In US corporations, the controller has to perform different roles. They are accountable for safeguarding shareholder's equity and protecting company assets besides ensuring accuracy in the financial statements produced. They ensure companies carry out their financial activities and prepare the statements as per GAAP and Sarbanes-Oxley Act (SOX).

The US controllers report on taxes and also generate statutory specifications for Internal Revenue Service (IRS). They also share these reports with other regulatory bodies, including Securities & Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), etc.

In addition, they take care of accounts consolidation for firms that have subsidiaries and daughter ventures to run. 

This article is a guide to what is a Financial Controller and its definition. Here we explain its jobs, skills, roles, and responsibilities along with examples. You can learn more about accounting from the following articles –

• Corporate Finance Career Path
• Controller vs Comptroller
• CFO vs Controller
• Compare - Internal Audit vs External Audit