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The Financial Control Function


Controller Career Overview: Budgeting is a key function of controllers and their staff, including the counting of spending and revenues. As the title suggests, they "control" access to corporate funds, exercising an important fiduciary responsibility. In many situations, professionals in the controller's organization must approve expenditures. Controllers typically are part of the organization headed by a company-wide or divisional chief financial officer (CFO). In smaller companies and organizations, the roles of controller and CFO may be combined.

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More Detail: In most companies controllers and their staffs develop reports and analyses that are crucial to the management of the business. In addition to the measurement and analysis of corporate profitability, controllers work closely with people in the marketing function in setting prices for the company's products and services.

In lean organizations, controllers can have broad job descriptions or a number of unstated additional duties, assuming a variety of additional roles. These can include market research, general data analysis, product management and product development, corporate strategy, business forecasting, liaison with information technology groups and acting as a de facto chief of staff for the line executive whom you support.

A large corporation will have multiple layers of controllers, depending on how its hierarchy of departments and divisions is organized. Working in a controllership function can be an excellent way to gain a broad knowledge of the business.

Importance of the CPA: While holding a CPA can help one advance in controller positions, or to rise to the post of a divisional or company CFO, it is not always necessary, especially in lower-level positions. Policies differ by company.

Controllers and Information Technology: In technology-intensive companies, including much of the financial services industry, controllers and CFOs should develop at least a rudimentary understanding of key IT concepts and issues. This will give them the necessary expertise to evaluate IT proposals and plans, which can have huge financial and strategic impacts. Cloud computing, for example, is one of the hot topics in IT today, and financial professionals thus should at least a passing familiarity with the concept.

Traits of the Ideal Controller or CFO: According to Financial Times columnist Luke Johnson (6/12/2009), these are the traits of an ideal CFO or controller, at whatever level of the organization:

  • Conservatism and prudence. Concern about the downside and risks of business decisions.
  • Attention to detail and mastery of facts about the company's (or entity's) financial position.
  • Hands-on facility with creating and analyzing financial reports.
  • Ability to explain complex financial issues clearly and concisely in plain language, without resorting to arcane jargon.
  • Expertise in information technology (IT), especially related to the company's accounting systems.
  • Backbone to stand up to the boss and respectfully disagree.
  • Willingness to work hard, and long hours if necessary.
  • Coolness under pressure.

Additionally, recent surveys of financial professionals by both Ernst & Young and IBM indicate a broadening of the role of the CFO (and thus, presumably, of others on finance staffs, such as controllers). See "Number cruncher to co-pilot," Financial Times, 9/9/2010.

This appears to validate the longstanding norm in the financial services industry where, as noted above, controllers, CFOs and other members of financial staff have strategic roles, not just record-keeping and reporting duties. The effectiveness of CFOs and controllers thus is ehanced by having prior operational experience, and by keeping in close touch with suppliers, clients and people in the operational divisions of the company. Moreover, it is important that controllers and CFOs have a great deal of independence from line management, so that they can exercise their fiduciary duties to the shareholders without interference.

Salary Range: The Bureau of Labor Statistics places controllers within its broad category of financial managers. In May 2010, the median annual compensation for financial managers was $103,910 and pay for the top 10% was over $166,400 (the latter figure grew by $34,400 or 26% since 2006). Within the financial services industry, controllers often are paid considerably more than these amounts.

Other Related Categories: You may want to browse our extensive library of articles on these other aspects of financial careers:

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