No matter the industry, the finance function has seen great changes in recent years becoming increasingly more strategic and visible when it comes to the growth of the company. It only seems logical that the role of the Controller has evolved just the same.
As a finance leader/manager, it’s important to keep an open dialogue with your Controller in order to manage the expectations of the executive suite as well as keeping others in operations informed. In my experience, this level of transparency streamlines the finance function and its processes which is good for the company overall.
With open communication, you can leverage the Controller’s strengths and talents to make sure the finance function is operating at its highest level of efficiency and accuracy. A recent CFO.com whitepaper discusses the five questions for finance leaders/managers to ask their Controller about best practices. I’ve summarized a few of their points and added a few of my own below.
1. How manual is our closing process?
Most accounting and finance professionals know that the more manual the closing process is the more chance for errors or inconsistences. Not to mention that manual processes tend to take more time. Therefore, you might want to consider creating a comprehensive set of policies so there are no gray areas for rules and procedures, while finding areas for automation. As much as you can formalize and document your processes, and eliminate manual entries, the better.
2. Are you compliant with local jurisdictions?
The Controller should be the main person to identify and minimize any risk associated with regulatory compliance. The finance leader/manager can help manage this by conducting regular reviews with the Controller to discuss any level of risk whether it be on the local or national level, especially if you’re company is in numerous markets.
3. What is our time period for closing the books?
One main measurement of effectiveness of the finance function is the timeframe and accuracy levels in which the team closes the books. If your time period for closing the books is too long, identify what is holding up the process and mitigate those areas that need improvement. For instance, it’s imperative that you have automated systems in place to support the closing of the books. In addition, analyzing the forecast for the upcoming quarters allows you and the Controller to provide more insight to others on the management team. Overall, the finance leader/manager needs to create a central review process for everyone to follow.
4. Is Excel still part of the process?
Love it or hate it, Excel will most likely remain part of the finance function for the foreseeable future. There are various imperfections of the program including security issues and lack of shareability, however, it continues to be a useful tool for Controllers. While your company should not rely solely on Excel, it is acceptable and powerful tool – as long as it’s properly managed.
5. Can we integrate the finance and operating functions/metrics?
Part of the Controller’s evolved role is that he or she is responsible for providing financial visibility. This can be enhanced by merging the financial data with the operational metrics of the company. C-levels and all finance leaders/managers can see a clear picture of the business with the collective data. Therefore, implementing a single reporting system for both areas accomplishes several strategies including financial truths, metrics and opportunities.
What are some other questions and best practices to discuss with your Controller? Comment below and let us know!