What is a Financial Controller?
A financial controller is a worker overseeing an organization’s daily money matters.
These include:
- Budgeting
- Cash flow management
- Treasury operations
- Accounting
- Revenue management
- Expense tracking
- Financial reporting
- Risk management
- Tax planning and compliance (e.g., ASC 606, IFRS, US GAAP)
- Accounting team oversight
Of course, the financial controller is usually the top accountant in the company and is in charge of ensuring everyone follows the company’s financial policies, processes, and standards.
They work for the CEO or the CFO if the company has one.
Businesses need financial controllers because they monitor budgets, manage cash flow, keep track of costs, and put together financial statements.
They also advise on smart purchases and ways to grow in the future. A financial manager’s job is to ensure that an organization’s money is handled correctly and on time. This helps the organization succeed as a whole.
Synonyms
- Financial Manager: A professional who oversees the day-to-day financial operations of an organization and ensures that they comply with regulations.
- Financial Analyst: A financial professional responsible for researching, analyzing, and interpreting financial data to inform business decisions.
- Chief Financial Officer (CFO): The chief financial officer (CFO) is the highest-ranking financial professional in an organization and is responsible for overseeing all of its financial operations, including strategy, budgeting, and investments.
- Treasurer: A specialist who manages all financial transactions and cash flow within an organization.
- Tax Manager: The individual overseeing an organization’s tax planning and compliance.
How and why financial controllers are important
Financial controllers are significant to the growth of any business. They make sure that the company’s resources are used well and that the financial records are a true reflection of its health.
Controllers make sure that financial records are made correctly.
Controllers are responsible for ensuring that the financial records are correct in many essential ways, such as recognizing revenue, valuing assets, and matching up payments.
Controllers need to know how complicated financial reporting is and ensure that all reports follow Generally Accepted Accounting Principles (GAAP) so that mistakes don’t cost much money.
They are in charge of budgets and look for ways to cut costs.
Financial managers are in charge of sticking to budgets and ensuring that spending doesn’t exceed income. They are also always looking for ways to cut costs and make things run more smoothly.
They give leadership advice and research on money matters
Often, people depend on controllers to make financial forecasts, look over investments, rate risks, and help make the company’s general financial strategy.
These insights can help leaders make business choices, talk to investors and other important people, and ensure the organization will succeed in the long run.
They help make sure that laws and rules are followed.
It costs corporations more than $60 billion a year to follow tax rules, according to figures. Without the help of a financial manager, businesses could face tax fines and other mistakes that cost a lot of money.
What Is the Difference Between a CFO and a Budget Officer?
A chief financial officer (CFO) and a financial controller (FC) have much in common. They both manage an organization’s finances and give financial advice.
They are also essential when a company is planning for the future.
But they are not the same in a few critical ways:
- The chief financial officer (CFO) sets the overall financial plan, while the controller runs the day-to-day financial operations.
- The CFO has a more significant say in decisions than a manager, and they answer to the CEO or board of directors. The CFO is in charge of the manager.
It is usually the CFO’s job to make long-term plans and oversee investments, which is more than the controller’s.
The CFO and the financial controller are essential parts of the finance team and play a big part in how well a company does.
The financial controller oversees day-to-day activities, while the chief financial officer (CFO) oversees more significant issues and decisions.
What Financial Controllers Need to Do
There are five main goals that financial controllers must meet for their business to be successful.
- Overseeing accounting tasks: The controller oversees all financial areas, including accounting teams, revenue operations, etc. The controller is in charge of all financial tasks, such as closing the books, keeping track of accounts due and receivable, making budgets, and preparing financial reports.
- Looking at and quantifying critical financial data is one way that controllers can help CFOs and other leaders look at investments, evaluate risks, and make intelligent business choices.
- Making financial reports: The financial controller’s job is to make financial statements like the income statement, balance sheet, and statement of cash flows.
- Making a budget: Controllers are significant in making a budget. They make sure that budgets are optimized, watched, and followed, and they also look for ways to save money in the future.
- Financial Risk Management and Compliance: Controllers ensure that their company follows all laws and rules and reduces future financial risks.
Accounting for money vs. controlling money
Both financial accounting and managing are essential parts of running a business, but they are not the same in some important ways.
- Financial accounting is studying and recording information about how an organization’s money moves. Controllers look at budgets, ways to cut costs, investments, risks, and other things to get a sense of the bigger picture.
- Financial accounting looks at the past and the present, while managers look at the books for the current year and plan for the future. Controllers use what they know to make predictions and income forecasts that help them plan and make decisions for the future.
- Financial accounting is a part of financial management, which the financial controller controls.
- Simply put, financial accounting keeps track of and reports on financial transactions. The controller then uses this information to oversee the company’s finances and make plans for the future.
Skills that financial controllers need to have
Financial controllers need to have many different skills to do their jobs well.
These are the most essential skills:
- Strong Accounting Skills: Controllers need to know a lot about accounting and be able to read financial records. To do their job, they need to have all the skills of a financial accountant.
- Analytical Skills: A big part of a controller’s job is to look at a lot of data and draw conclusions about the business’s health and income growth. They must be very good at solving problems and using data to do this well.
- Good communication skills: Because controllers are in charge of many people on the finance team, they need to be able to explain goals and standards clearly.
- Strong leadership skills: Controllers need to inspire their team and ensure everyone is working together to reach the same goal.
- Business sense: A controller needs to know much about how businesses work and have good accounting and management skills. They need to be able to plan and make intelligent choices about investments, risks, and other money issues that affect the whole company.
Things that financial controllers can use
Many tools can help controllers do their work better. Controllers can manage teams well and ensure accurate financial reporting by automating many chores and putting collaboration first.
- Accounting Software: You need accounting software to track and manage your business’s financial information.
- Keeping track of expenses: Software that keeps track of expenses makes it easy for controllers to keep an eye on employee spending and ensure they follow business rules.
- Tools for Making Budgets: These tools make it easy to make budgets and track how well they’re being met.
- Payroll Software: Automated payroll tools work with accounting software to make tracking employee pay and expenses more manageable.
- Financial Dashboards: These help controllers see all their data in one place to make quick, intelligent choices. Besides that, they can be used to show other people on the business team and important people what’s going on.
- Risk Management: Software like Riskpulse or Resolver that helps with risk management makes it easy and quick for controllers to find and reduce possible financial risks.
- Billing Software: This type of software helps managers automate the process of billing and collecting payments. This saves time and makes sure that payments to workers and vendors are always made on time.
