As businesses expand their operations, pursue international business opportunities and relymore heavily on data and technology, the role of the financial controller is changing aswell. Regarded as a company’s lead accountant and charged with the oversight ofday-to-day financial operations, many financial controllers are now also involved instrategic planning and decision-making. They’re expected to know about accounting andfinance reporting systems, have a solid background in data analysis, and possess strongleadership skills, business acumen and communication skills.
Such changes don’t come without challenges. But those challenges aren’tinsurmountable. Here’s a look at 10 of the most pressing challenges financialcontrollers are facing and what they can do to overcome them.
What Is a Financial Controller?
A financial controlleris a senior-level manager who is responsible for all of a company’s accounting andday-to-day financial activities. While the scope of responsibilities varies from one companyto the next and may fluctuate based on the size of the company, a financialcontroller’s typical duties include:
- Preparing operating budgets.
- Managing budgeting schedules.
- Overseeing financial reporting.
- Collecting, analyzing and consolidating financial data.
- Performing payroll duties.
- Reporting material budgeting variances or expenditure variances to management.
- Recruiting, selecting and training staff.
Financial controllers typically report to the company’s chief financial officer (CFO),though smaller organizations — where employees often wear many hats — maycombine the two roles into a more strategic position than the one that exists at theirlarger counterparts.
10 Financial Controller Challenges & Their Solutions
Financial controllers are facing a variety of new challenges as businesses continue toevolve. Today, they must be stewards of data and technology, prioritize new skills andassume leadership roles to drive the finance and accounting function forward. Among theitems on their priority lists:
A distributed workforce. Organizations contend that working remotelyworks, with 83% of employers saying the shift to remote work has been successful attheir companies, according to PwC. Despite the many positives — increases inemployee productivity fostered by advanced technologies, among them — adistributed accounting workforce can hinder financial controllers in terms of teambuilding, communication and mentoring less experienced staff. All can lead to theperfect storm of errors that can be time-consuming and tedious to fix.
A centralized business system, such as an enterprise resourceplanning (ERP) solution, used by all employees can help financialcontrollers manage their distributed workforce better and ensure the accuracy ofeveryone’s work. Many ERP systems include workflow tools to monitorbottlenecks, eliminate data silos and provide insights into a team’s workloadand productivity — activities that financial controllers once achieved throughdirect observation.
Evolving technology. Financial controllers today must not only beexperts in the financial close, planning and reporting process, they also need topossess strong acumen in technology. In fact, according to Gartner, nearly half(45%) of IT spending will be shifting to cloud-based technologies, some of which mayinclude finance and accounting software.
Accounting and finance are especially well suited for advanced technologies,benefiting from process automation, advanced analytics, machine learning (ML) andartificial intelligence (AI). These technologies analyze data in real time and turndata into valuable business insights — all of which can provide windows intoimproved business performance and savings. They also free up employees fromerror-prone manual tasks and let financial controllers focus more on strategicendeavors.
Data accessibility. Organizations are collecting data in recordamounts. By 2025, the amount of data in the world is expected to reach 175 billionterabytes — a leap of 66% from 2018, according to McKinsey & Company. Thisexponential growth is replete with opportunities but managing it for competitiveadvantage can also prove challenging for financial controllers, who have aresponsibility to help steer development of data governance and data strategy forthe organization, as well as apply the insights to financial planning, deployingassets, managing liquidity and more.
See AlsoInternal ControlsAccountability & Internal Controls25 Key Financial Controls for Small BusinessesWhat Are Financial Controls and Best Practices?Some of the ways financial controllers can improve data accessibility include helpingto lead data-standard alignment across departments, advocating for adopting alayered architecture that’s flexible enough for changing business needs, anddeploying technology such as machine learning to clean and produce higher qualitydata. Integration can automatically capture financial and operational data into acloud-based solution that becomes a single source of truth for analysis and decisionmaking.
Storytelling with data. They may be the face of accounting, butfinancial controllers can’t rely solely on the numbers to talk for themselves.That’s why it’s critical for financial controllers to demonstrate stronginterpersonal and communication skills, so they can liaise with other departmentseffectively and win executive buy-in.
Yet, more than just communicating effectively, financial controllers must be able todistill financial reports and other new or difficult concepts and ideas intoaccessible language for clients, investors, board members, management and their ownteams. Telling a story is even more impactful: A recent survey of 500decision-makers found 71% said data storytelling skills — the“why” behind the data — are very important when reporting resultsto the C-suite or other key stakeholders. About half (49%), however, said theirorganizations lack this critical skill.
Financial controllers must be comfortable with data and data analysis and use it tosupport the story they want to tell. Data dashboards and other financial tools canhelp develop a narrative that makes a message more memorable, while fosteringstronger business relationships.
Global expansion. Ecommerce capabilities and other new technologiesmake it much less complicated for organizations to expand their products andservices to a global audience. In fact, the proportion of tech firms with a presencein five or more markets is set to increase radically from 29% in 2020 to 70% by2025.
Growing internationally, however, presents a number of challenges for financialcontrollers. For example, they will need to know how to manage the tax andregulatory compliance requirements of the various countries with which theorganization does business. Other considerations include multicurrency conversioncapabilities, global financial reporting tools, and freight, insurance and customsoversight.
Having the right software in place is critical fororganizations that go global. Financial controllers who use solutions that includemultiple currencies, taxation rules and reporting requirements across geographiesand provide real-time financial consolidation and visibility will be well positionedto help their companies.
Changing business models. Beginning in 2020, nearly allorganizations — 96%, according to McKinsey — were forced to revise theirbusiness models to adapt to the rapidly evolving business environment and newmandates. The results appear lasting, with companies changing the way they monetizeservices and trending toward subscription-based services, ecommerce and bundledproducts and services — all of which require more complex accounting. Again,flexible technology solutions that adjust to financial controllers’ needs cango a long way in remaining competitive. Cloud-based systems often support rapiddeployments, along with the ability to customize and scale, without heavy lifting.
Talent retention and development. Employeeretention weighs heavily on finance and accounting managers, with eight outof 10 expressing it as a top concern, according to a 2022 salary guide. Low moraleand high rates of burnout are contributing factors.
To boost morale and reduce burnout, financial controllers should work with theirhuman resources department to make sure employeeretention strategies are in place and in use for their teams. Some of thesestrategies include reviewing and streamlining the onboarding and orientationprocesses, obtaining feedback through engagement surveys, providing mentorshipopportunities and offering training to upskill employees.
Upskilling. While it’s important to provide training andlearning opportunities to finance and accounting teams to solidify retention,it’s equally important that financial controllers invest in their own careersby staying on top of the latest trends and brushing up on the newest skills.
While most of the financial controller’s traditional skill set will remainrelevant, the addition of new, more strategic skills is also expected. Examplesinclude development of an affinity for digital tools and technology, expertise indata analytics and competence in controlling agile teams. More than one-third ofCFOs, for example, believe that business analytics skills should be mandatory foreveryone in accounting and finance, according to the 2022 salary guide. Financialcontrollers should also seek out training, e-learning and certificationopportunities to tackle acquiring these competencies.
Security. Concern about data and privacy breaches was the barriermost frequently cited by finance executives for failing to realize their fullpotential as drivers of strategic change, according to an Accenture report. Thereport also found that only 28% of finance professionals are engaged in managingrisk through data security.
In many organizations, chief technology officers (CTOs) report to the CFO, leavingfinance executives, including the controller, in a good position to have an impacton —and even lead — security efforts. One way to mitigate security risksis toadvocate for a cloud-based technology strategy, which provides a number of securitybenefits. These include improved regulatory compliance, more frequent applicationspatching and end-to-end security for remote workers.
Robotic process automation (RPA). Sometimes referred to as“smart automation” or “intelligent automation,” RPA refersto a growing area of advanced software systems that program “bots” toperform a series of tasks that previously required human intervention. As of 2020,finance professionals said 60% of their traditional finance tasks were automated, upfrom 34% in 2018, per Accenture.
Financial controllers are well positioned to play an important role in an RPAprogram, which has the potential to reshape finance and accounting processes. Thesame skills that organizations have long relied on for investment valuation, projectmanagement, process documentation, and assessing, defining and implementing controlsare also critical to an RPA program.
For organizations just beginning their RPA journey, financial controllers canencourage leadership and IT to gauge whether there’s an opportunity to explorethe technology. They can also request quotes from RPA vendors, learn about pilotopportunities and earn RPA certificates to deepen their expertise in the area.
Today, financial controllers are being challenged by a variety of factors — rapidlyevolving technology, new business models, increasing amounts of data, changing skill setsand more. Skilled financial controllers armed with top-tier financialmanagement software and data, however, will be well positioned as strategic businessleaders capable of driving finance and accounting teams into the future.
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Controller Challenges FAQs
What kinds of problems do financial controllers find?
Financial controllers may encounter a variety of problems, such as financial reportingissues, budget deviations, losses due to theft or mismanagement of risk, unbalanced budgets,errors due to improper techniques, and incorrect data.
What are the challenges of financial management?
Financial management faces myriad challenges. They include accurate record-keeping, managingspend-down, timely financial reporting, financial analysis and regulatory compliance.
What are the challenges of financial accounting?
Suffice it to say, financial accounting is not for the faint of heart. Financial accountingchallenges include improving cash flow, managing financial disclosures, hiring andretaining talent, adopting automation and artificial intelligence, upskilling, learningabout tax law changes and understanding expense management.
Is a financial controller a stressful job?
A financial controller is a senior-level manager who is responsible for all of acompany’s accounting and day-to-day financial activities. That’s a tall order. Ahigh volume of work, tight deadlines, compliance demands, team oversight and impeccableaccuracy can make a financial controller’s job stressful.
