What to look for in a controller

The controller should be the most knowledgeable person in the company about its accounting and finance operations, its financial controls, and the content of the company’s financial reports, what they contain, and what they mean. The controller knows where financial results were out of line with budgets and/or prior periods and is proactive in reaching out to operating managers to get answers and make suggestions to get future results back on track.

So let’s break that down a bit. If you’re looking to hire a controller for your company, or you’re a senior accounting manager with the desire to become a controller, or perhaps you’re the company’s CEO or CFO and you want some metrics on how well the person in that job is doing against a common standard, here are some thoughts to consider.

First, a brief list of the responsibilities that a good controller will consistently perform well:

Produce monthly financial reports that are appropriate for the management of your company and in a format that is understandable to those who will use them, on a reliable timetable, and with all the numbers in the right places. In short, those reports will consistently be accurate, relevant, and timely, or ARTistic, if you will.

Manage your budgeting and forecasting process, from guiding the company-wide development of budget and forecasts, to timely monthly reports of performance against the budget and forecasts, and actionable suggestions for correcting significant variances. The issuance of monthly variance reports should be accompanied by explanations behind those variances, ideally in writing. All without waiting for someone to ask.

Effectively communicate to those who need to know what the financial information says about your company at a level that is meaningful to them — your management team, your external auditor, your banker or prospective banker. The controller should also be able to communicate with the senior leadership team about business strategy and ways to better execute the company’s mission.

Develop awareness and trust among an organisation’s stakeholders. Essentially, the controller needs to be your go-to person for looking at financial information from a different angle, such as what your planned new product will actually cost to produce. If your company doesn’t have a person in the CFO role, this becomes even more important, because your controller is also the senior financial person in your company.

Strategically deploy technology to gain better insight and inform decision-making. Automate routine processing tasks where possible. Cloud computing, data analytics, and artificial intelligence are now accessible technologies that controllers should be implementing when there are benefits to be achieved.

And finally, leading your accounting team, by hiring effectively, guiding the team’s performance, encouraging growth, and mentoring those with potential, all while ensuring the right people are in the right jobs and the department gets its work done efficiently and effectively.

OK, that’s what you should expect from the controller. What are some of the clues that the controller is not performing at the expected level? Here’s a short list:

• Monthly reports and other projects are consistently late, even though there is an established timetable for their completion.
• No one wants to talk to your controller because it’s too much work or your controller is too busy to be bothered. (Hint: This could also be an indication the department is understaffed or underqualified, with the controller picking up the slack rather than making staff changes.)
• The controller frequently works late into the evening (but refer to the hint above as another possible cause).
• Requests for financial analysis must be very specific as to format and content, and you have to follow up regularly to be sure you get your request met.

How do you fix this if it’s happening in your company? First, try to clearly evaluate the situation. Does your controller have the right tools and hiring authority? An effective controller will have already told you about these concerns. If that’s not the case, meet with that person and lay out a corrective plan that you both agree on, and then stick to it. The plan will be specific in terms of milestones for improvement and a timetable for you to see that improvement. If the agreed-upon plan doesn’t get substantially achieved on time, it’s probably time to make a change in the interest of everyone involved.

Now let’s assume you are looking for your next controller, either because you took the action above or the position is open for any of the various reasons turnover occurs. Here are some do’s and don’ts for that recruiting process to be successful:

1. Develop a solid job description — what you need done and what background you need, including appropriate professional qualifications, to get it done. Then stick to the job description in your hiring process.
2. Get expert advice on what level of compensation that position should command in your company. Don’t decide ahead of time that you have a small budget and can only hire someone who will take the job at that salary. Be assured that someone will take the job at that salary — but maybe not the person you need.
3. Set up the screening process so that only candidates who meet the technical qualifications get to the final interview stage. Don’t make the common mistake of favouring someone you really like who doesn’t quite meet the experience requirements, who you hope will pick it up on the job. That’s called gambling.
4. If the candidate held the controller position only once, at their last job, and they left after three months in that position, that’s a red flag that something didn’t work out. Dig deeper.
5. Ensure you and the successful candidate agree on the components of a probationary period, usually 90 days or so.
6. Once you have made a hiring decision, hold onto the CVs of the qualified backup candidates for six months, just in case.

Follow these tips to be successful in finding the right controller for your organisation.

— Gene Siciliano is a former CFO, COO, controller, and treasurer with over 30 years of experience in private practice, consulting, and corporate management. He is based in the US. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.