CHAPTER 2
Defining the Role of a Controller

OVERVIEW

The controllership function is carried out by a controller, which usually is the individual in charge of and with authority over the processes related to finance and accounting. A controller has the main goal of keeping the company's bottom line secure by accurate internal controls and well-defined financial operations. But a good controller needs to be aware of all areas of risk that may impact a company and its ongoing success.

The role of the controller is often defined as being a business partner to other functions and divisions within an organization. In many organizations the role of the finance professional is defined as being a business partner to the organizations supported.

Controllers are faced with much broader challenges and opportunities in today's business world and are being asked to take on additional responsibilities outside of the traditional "chief accounting officer" role. Controllers are connected to most of the key business processes within an organization. Controllers provide the stewardship and accountability systems that ensure that the organization is conducting its business in an appropriate, ethical manner.

Controllers and their staffs should also provide the information, analysis, and advice that will enable the organization's operational management to perform effectively. This means understanding the impacts that the supply chain can have upon the accounting processes for the organization.

Controllers are process driven and are always looking for practical tools to manage their areas of responsibility and to advance their careers. These tools can extend the competencies and efficiencies of corporate and controllership processes, which fall under the umbrella of governance, risk management, and compliance (GRC).

CONTROLLER'S TOOL 1 - SUGGESTED JOB RESPONSIBILITIES FOR A CONTROLLER

Introduction. Monster is a global online employment solution for people seeking jobs and employers. Monster has expanded from its roots as a job board to a global provider of a full array of job-seeking, career-management, recruitment, and talent-management products and services. Monster recommends the following list of job responsibilities for a controller:

1. Achieves budget objectives by scheduling expenditures, analyzing variances, and initiating corrective actions.

1. Provides status of financial condition by collecting, interpreting, and reporting financial data.

1. Prepares special reports by collecting, analyzing, and summarizing information and trends.

1. Complies with federal, state, and local legal requirements by studying existing and new legislation, anticipating future legislation, enforcing adherence to requirements, filing financial reports, and advising management on needed actions.

1. Ensures operation of equipment by establishing preventive maintenance requirements and service contracts, maintaining equipment inventories, and evaluating new equipment and techniques.

1. Completes operational requirements by scheduling and assigning employees and by following up on work results.

1. Maintains financial staff by recruiting, selecting, orienting, and training employees.

1. Maintains financial staff job results by coaching, counseling, and disciplining employees and by planning, monitoring, and appraising job results.

1. Protects operations by keeping financial information and plans confidential.1

CONTROLLER'S TOOL 2 - CORE COMPETENCIES OF A CONTROLLER

Introduction. Within their companies, controllers are always looked upon as accounting and financial leaders. Many controllers are thought of as the chief accounting officer. I recently authored a blog entry for Nvoicepay that highlights the 15 leadership skills that a controller should have. Controllers should have a blend of skills from two key areas: (1) accounting and business knowledge, and (2) leadership and influence, as listed below.2

1. Cost Control. As an example, a cost-control process would be implemented for a major project to monitor cost performance, ensure changes are recorded accurately, prohibit unauthorized changes, inform stakeholders of cost changes, maintain expected costs with acceptable limits, and monitor and document reasons for favorable or unfavorable cost variances. As a controller, you're responsible for controlling cost. This involves developing policies and procedures, systems, processes, and metrics to make sure that costs are under control.

1. Internal Controls and Compliance. A controller usually has overall responsibility for the internal controls program and processes for their organization. This means that the design, development, and testing of the operational effectiveness of each control is the responsibility of you and your team. If you work for a publicly traded company, you'll also need to prepare all of the quarterly and annual reporting requirements for Sarbanes-Oxley (SOX).

1. Financial Reporting and Adding Value. Controllers and their staffs typically drive the fiscal closing process and are always looking for ways to streamline the process and provide the results sooner through automation and a quicker closing process.

1. Corporate Transaction Processes. Controllers have ownership of corporate transaction processes, which include accounts payable, accounts receivable, payroll, travel and expense (T&E), general accounting, and others. There are always large opportunities for streamlining these processes, as evidenced by automation and transformation initiatives in the procure-to-pay (P2P) and order-to-cash (O2C) processes.

1. Corporate Knowledge. Controllers should have an excellent knowledge of what their companies do and how they are organized. What is the culture of the company? How is the company organized? How quickly do decisions get made?

1. Efficiency Improvements. Along with having a solid knowledge of the corporate transaction processes that are the backbone of your company, you should always look for ways to improve them through process efficiencies and automation. Are there ways to combine similar processes into a shared services organization? Can you reduce manual invoices through implementing an e-invoicing solution? Can you streamline your payment process by implementing e-payment solutions or even outsourcing your payment process?

1. Analytics. A savvy controller is driven by analytics and metrics. The results of a well-developed metrics program will indicate how well your company's business processes are working and where improvements were successfully implemented. Metrics will also reveal problem areas and should have the analytics to drill down to find the solution.

1. Business Partnerships. Since a controller oversees the accounting processes for a company, maintaining good business partnerships is a key success factor. You should identify your areas of influence and ensure you have a good relationship or partnership with the leadership in other departments. Key departments usually include information technology (IT), legal, human resources (HR), business ethics, supply chain, and procurement.

1. Communication. Communication is a personal process that should be appropriate for both the audience and situation. Choosing the wrong communications channel could send the wrong message. For example, a decision that dramatically impacts a person's career should never be delivered via an impersonal form letter. It's always good to consider how it would feel to be on the receiving end. Think about it: If you were being recognized for outstanding work or many years of service, would a personal thank-you note or an e-mail be more meaningful to you?

1. Active Listening. The concept behind active listening is encouraging the speaker to state what they really mean and stems from the work of counselors and therapists. The goal of active listening is to help associates express themselves, offer suggestions, and get to the root of a matter.
   1. Listen for the content of the message and organize it into key components.
   2. Listen for feelings about the key points being conveyed.
   3. Ensure that you respond to feelings appropriately and with compassion.
   4. Be cognizant of any overreaction to the situation.
   5. Watch verbal and nonverbal signals and be prepared to reconvene the discussion if necessary.
   6. Repeat...