Financial controllers play a vital role in the management of a company’s finances. They work to ensure that the company has sufficient funds to meet its obligations and that the company complies with legal requirements, as well as taking charge of overseeing the day-to-day operations of a company. Their responsibilities include managing cash flow, preparing financial reports, ensuring compliance with accounting standards, and monitoring risk exposure.
To get a better understanding of the role of a financial controller, and see why you might need chief financial officer services for growing business needs, we took a closer look – read on for all you need to know.
What is a financial controller?
A financial controller is responsible for overseeing the management of a company’s finances. This includes ensuring that it can pay its bills and meet its obligations, while at the same time complying with legal requirements. The financial controller works closely with the chief executive officer (CEO) and other senior managers to ensure the company meets its goals.
The financial controller is often referred to as an internal auditor. While this is not technically correct, they do have some of the same duties as an external auditor. An external audit is carried out by an independent firm of accountants who are contracted to check whether a company’s accounts are accurate and complete. For example, they will examine the books and records of a business to make sure that everything is being recorded correctly.
The financial controller oversees the preparation of the annual report, which is usually presented to shareholders during the AGM.
They are also responsible for ensuring that the company complies fully with accounting regulations and laws.
What does a financial controller do?
Some of the main roles that financial controllers are responsible for include:
- Preparing financial reports
Financial controllers prepare financial reports for their companies. These reports provide information about how much money the company makes and spends each month. They also show how much profit the company made over a certain period of time.
In addition to these basic reports, financial controllers may be asked to produce more detailed reports such as balance sheets and income statements.
- Ensure compliance with accounting standards
Financial controllers must ensure that their companies comply with the relevant accounting standards. These standards set out what should be included in the financial reports produced by a company.
For example, if a company produces sales invoices, then it must record them in the appropriate place in the accounts. If a company does not follow the rules, then it could face fines from the regulator.
- Monitor risk exposure
Financial controllers monitor the risk exposure of their companies. This involves looking at the potential impact of any problems that might occur. For example, if a company is planning to expand into new markets, then it needs to consider how this would affect its finances.
If there are any issues, then the financial controller will take steps to prevent them from happening again.
What is the difference between a CFO and a financial controller?
Some organisations use two separate roles to oversee the finances of their company. One person is responsible for the day-to-day management of the company, while another focuses more on the long-term strategy.
The role of the chief financial officer (CFO) is usually held by someone who has been promoted from being an internal auditor. Their job is to look after the finances of the company and ensure that they are meeting the targets set out by the board of directors.
The role of the financial controller is often taken by someone with previous experience in accounting. These individuals are responsible for monitoring the financial position of the company, and making sure everything is going smoothly.
What is the difference between a financial controller and an accountant?
In some cases, it may seem like there isn’t much difference between a financial controller and an accountant. However, these professionals do play very different roles within a company.
An accountant is responsible for recording transactions and ensuring that they comply with tax regulations. This means that he or she must be well versed in both accounting and taxation.
As a result, accountants tend to focus on the numbers behind a company’s finances. They ensure that the accounts are kept accurately, and that any tax payments are made correctly.
On the other hand, a financial controller focuses more on the broader picture. He or she looks at a company’s performance over time, and makes sure it remains profitable.
As a result, a financial controller tends to spend less time analysing figures than an accountant does. Instead, he or she spends most of his or her time looking into areas such as strategy, marketing, and employee relations.
How to become a financial controller
There are many different routes that people can take to become a financial controller. Some choose to study for a degree or diploma in finance. Others aim to work their way up through a series of jobs before becoming a full-time financial controller.
A few options include:
- Start at the bottom
One option is to start your career as a junior accountant. You will need to gain experience first though, so you won’t get paid until you’ve completed around four years’ worth of work.
- Become a junior accountant
Another option is to join a large organisation like a bank or insurance company. Here, you’ll learn all about the basics of bookkeeping and auditing.
- Join a small business
You could also try working for a small business. In this case, you’ll be expected to manage the day-to-day running of the business while learning all about the various aspects of managing a company’s finances.
- Get a diploma or degree
You could also earn a qualification in finance. There are several courses available including a bachelor’s degree, master’s degree, and a diploma.
What skills will I need to be a financial controller?
To become a financial controller, you’ll need to have good knowledge of:
- Accounting principles
This includes understanding the difference between assets and liabilities, and knowing which ones make up the overall value of a company.
- Business law
You’ll need to know what laws apply to businesses, and how they can impact on the company’s operations.
You’ll need to understand the different types of finance used within businesses, and how they’re managed.
You’ll need to understand the marketing techniques used by businesses, and how they influence customer behaviour.
- Management skills
You’ll need to be able to lead a team of employees, and motivate them to achieve success.
If you want to pursue a career in finance, you could do a lot worse than becoming a financial controller – this is a fast-paced interesting job that will let you keep your mind sharp, and make a real difference to the company you work for.