Accounting

Analyzing the Changing Role of the Modern Financial Controller

Many accounting professionals have noticed a shift in the roles financial controllers and CFOs play in a traditional business hierarchy, but until recently, we’ve only had anecdotal evidence.

A recent report conducted by Dimensional Research which polled more than 200 corporate controllers confirmed these suspicions, providing data that points to financial controllers acting more like chief financial officers than ever before.

To analyze the results of the study, FloQast’s Blake Oliver recently hosted a webinar with Diane Hagglund of Dimensional Research and Carlos A. Catalan, PMP, Director of Strategy & Business Transformation at Citrin Cooperman. The group discussed how the role of the financial controller is changing, why it’s happening, how the change impacts the day-to-day lives of accounting professionals, and what role technology has played in the transformation.

Controllers pointed to the changing role of the CFO and the speed of technology changes and the top two factors causing the role of the controller to evolve.

Thinking Strategically

Prior to conducting the survey, Hagglund admitted that image of a controller she had in her head was based on Hagglund’s experience many years ago interning at a potato chip company in the Midwest as an accounts payable clerk. That stereotype was erased as the results from more than 300 controllers and financial professionals started to roll in.

Given the timeframe respondents were asked to consider — the last 10 years — the results surprised Hagglund.

“Ten years ago was not that long ago, and yet, we’re seeing that there has been a lot of change happening just in that period of time,” she noted. “When we ask controllers what happened to their role in the past 10 years, the vast majority said that the controller job is more important and more strategic… That’s a lot of change happening in just one decade.”

Controllers say they are spending more time on strategic planning, risk management and mitigation, and talent management.

The Cause

As it turns out, understanding the shift means understanding how other positions — particularly the CFO — have evolved in the last decade.

We wanted to drill down and understand what is it that’s driving the change. What are these factors that are causing the role of the controller to evolve so quickly,” asked Hagglund. “There’s a bunch of underlying trends having an impact, but hands-down, the number one reason for change reported by controllers is that the CFO’s role has changed. There’s been a lot of discussion about the changing role of the CFO in the press, but there hasn’t been as much conversation about what’s happening to the rest of their responsibilities as their job is changing.”

Controllers pointed to financial close or close management software as having the greatest potential to positively impact their job.

Speed, Speed, Speed

Expediting existing processes has never been more important for finance and accounting teams. Given the insight that can be gathered by executing a quick, thorough financial close each month, survey respondents reported that not only would implementing an effective close management software positively impact the job of the controller, but the majority also chose close management software over Cloud ERP.

This is something that Carlos Catalan of Citrin Cooperman tries to impress upon his employees regularly.

“One company I’m working with right now is closing the books around the 15th or 20th of the month” he said. “They weren’t doing any accruals around their invoicing process. They would wait for all the invoices to come in, and then start the close.”

Catalan said that for this company to improve, “The first step is identifying areas to accelerate the close to get actionable information faster. In this case, it was about utilizing technology to do the accruals faster, but in almost every case — and I think this is what FloQast does so well — it is about looking at the current state of things to identify where there are opportunities to improve. Find the bottlenecks, and you’ll improve the overall process.”

John Siegel

John Siegel is a Corporate Communications Manager at FloQast. Prior to joining the company, he wrote about Los Angeles-based tech companies for Built In LA. You can follow him on Twitter @JVNSiegel.