How Controllers Can Pave the Way to a More Productive Finance Team
Evolving FP&A Roles in a Unique Corporate Landscape
The responsibilities and competencies of different positions in a modern corporate finance team have undergone considerable changes. The changes of the Financial Controller (FC) role are particularly critical to note, as they have significantly more impact on an organization’s success than they used to have. FCs today need to do more than just number crunching and other traditional roles, accounting oversight, and providing clarification to senior management. They need to be ready to enhance their interpersonal communication skills, brush up on their leadership skills, and other skills traditionally relevant to executive level responsibilities. Additionally, CFOs must develop their proficiency in the use of emerging technologies essential to competing, innovating, and growing in today’s global economy.
Modern FC Responsibilities & Competencies
While the controller’s duties will continue to include accounting oversight, forecasting, and streamlining accounting operations, it will also include business administration and financial planning.
Here some of the most important competencies FCs must possess in modern FP&A:
1. Collaborates and thinks critically
Given their detailed view of financial activity in accounts receivable as well as accounts payable (and its partner, procurement), financial controllers already have immediate access to information useful to the CFO. However, today’s FC is more likely to leverage their position to analyze and generate their own strategic insights in collaboration with the CFO, rather than simply serving up information. In this way, the FC can provide high-detail, granulated financial analysis that can be used by the CFO for broader financial planning. A collaborative approach can also vastly improve risk management. With their detailed view of internal processes (and related internal controls), FCs are well positioned to identify and communicate risk to the C-Suite before a potential problem becomes an actual crisis. Financial controllers can also proactively develop risk mitigation strategies based on their own analyses.
2. Able to fit in any scale and stage of growth of an organization
If a company is a small, fast-growing start-up, a controller mostly experienced with larger organizations may not have the appropriate approach to help address your most important issues. If your company is more mature, a controller experienced with small companies may not have sufficient strategic thinking, nor be able to develop a strong team. The best controllers have the right mix of skills and interests for a variety of challenges, with the ability to scale the company in the short-to-medium term. As an organization scales it isn’t unusual for the controller to either be upgraded or for a chief accounting officer to be hired over them to help bridge gaps.
3. Creates accurate financial statements on a predictable and timely schedule
Getting to a faster monthly close means that the team will have more time each month for process improvement, making the next monthly close even better. In a larger private company, good FCs will have a plan to reduce monthly close to a public company timeframe while also maintaining the sanity of the team. It’s important not to use the entire month (or more) to close the books, as this leaves no time for process improvement, and thus the team ends up perpetually in a state of exhaustion and stress.
4. Communicates well within finance and broader organization
This means engaging with senior management to expand the responsibilities of the FC as reasonable to drive greater value. A good FC knows that he or she is part of a collective team that only succeeds together:
5. Build and lead a strong accounting team
An FC must hire the right people for the role, for the team, and the company culture. There have been too many cases of FCs mis-hiring, and wind up doing all of the work themselves, and then complain about it to everyone who will listen.
6. Sets clear expectations with the team and follows up
Effective controllers set goals for themselves and their team focused on continual process improvement. They ask lots of open-ended questions and learn from the answers.
A good FC will ensure the finance team delivers outstanding service to the rest of the enterprise. Good FCs are aware that finance does have customers (the rest of the enterprise) and won't ignore the needs of other departments.
8. Proficient in the majority of the operational and technical accounting concepts relevant to the business
At a smaller company, the FC might not have the same depth of technical accounting knowledge but will still be fluent in the key concepts so as to know when to ask additional questions or flag issues. What an FC should not do, is assume that the auditors will figure out all of the technical accounting issues in the audit so he or she minimizes their effort expended on investigating them.
9. Reorients the finance function toward value in tandem with savings
Technical Competencies in Modern FP&A
FCs need to know how to leverage technical innovations to manage risk and generate value. They must not only develop their own ability in using new tools, but that of their teams as well. The modern controller must posses the following two skills:
1. A deep understanding of critical business functions and value drivers
This may involve investment in further education and training (advanced degrees, financial, operational, and technological certifications, etc.). It is particularly critical to eliminate skill gaps in the accounting department, both through training for existing staff, and by recruiting team members well-versed in strategic planning, collaboration and communication, digital transformation technologies, etc. FCs should also take on projects in other areas of the business to gain knowledge and insight. This means using analytics and performance metrics to identify opportunities for not just cost savings, but value creation through cost avoidance and proactive accounts payable risk management.
2. Proficiency in processes, systems, and their underlying data, and will work closely with engineering and IT partners to get the best out of their technology tools
High tech resources like FP&A software offer a multitude of benefits to any finance team. Such software can improve FP&A team’s data insights, accuracy, efficiency, management, and reporting. That considered, FCs should be proficient in the use of this powerful tool in order to maximize their organization’s productivity.
Concisely put, an effective modern FC must be able to execute not only their traditional tasks, but that of executive roles, in addition to orienting themselves and their team’s towards the latest and effective high tech resources.