As the office of the controller becomes ever more strategic—creating higher levels of financial visibility to help drive growth and profitability—the financial organization’s relationship to the controller role must evolve as well.
Specifically: Today’s CFO needs to work closely with the controller to ensure that, one, the organization gets the full benefit of the controller’s talents and knowledge and, two, the controller’s office is operating at the highest levels of efficiency and accuracy.
Ask your controller the following five (5) questions to initiate a conversation around best practices.
Question 1: How many manual journal entries are we making during the closing process?
An excessive number of manual journal entries needlessly extend a closing period—and can also be a leading indicator of lurking problems. They can conceal anomalies and errors that actually have broad, systemic roots. You may be plagued with variable accounting processes—or a level of complexity that calls for revised standards.
To optimize the closing process and reduce the incidence of manual journal entries, you and your controller can create comprehensive policies, work with auditors, formalize the process of manual journal entries, and store documentation with manual entries.
Question 2: Have you reviewed compliance with local jurisdictions?
As one of the few people with a direct role in virtually every transaction that flows through the corporate accounting structure, the controller can—and should—play a central role in identifying and minimizing the company’s risk exposure. This is especially critical for growing companies, whose regulatory compliance risks steadily increase in magnitude and quantity over time.
The best practices including creating a risk framework, conducting regular risk reviews, and ensuring local jurisdiction compliance.
Question 3: How long does it take to close our books? What’s holding things up?
The best measure of controller efficiency is how quickly and accurately the team closes the books. Start with strong planning and preparation, such as handling all billing and expense issues prior to the periodend. Automation is also essential—it provides the desired speed, efficiency, and accuracy without increasing staffing levels.
A fast close enables the accounting and finance team to move beyond merely reporting results and into forward-looking activities that can shape future outcomes. You and the executive team need financial information as soon as possible to make any necessary course corrections. This information includes traditional financial statements (income statement, balance sheet, and statement of cash flows) as well as operational reports and detailed analyses of business results.
Question 4: Are we still using Excel? If so, why?
While there are many reasons to limit Microsoft Excel use in corporate accounting—such as its inherently breakable models, security issues, and lack of shareability—it can still be useful to controllers in certain situations. Love it or hate it, Excel has been—and will likely remain—one of the go-to components in every accountant’s toolkit. Just make sure you’re clear on why you are using it.
Some of the best practices for using Excel include isolated tasks, as an ad hoc reporting tool, and ancillary reporting.
Question 5: Can we integrate our financial information and our operating metrics?
Because many financial systems can now accommodate analyses of operating metrics to create a richer, fuller picture of the business, the controller is assuming a role as the provider of financial visibility—once the domain of financial planning and analysis (FP&A) teams or the CFO.
Merging financial data and operational metrics could help your organization in spotting the opportunities, emphasizing operational metrics, and establishing the financial truth.
Exploring the answers to these five questions with your controller will help create a stronger, more effective financial structure. Learn more in 5 Questions CFOs Should Ask Their Controller.
