Financial Controller

Financial Controller Definition

Financial controller is one of the senior-level executive of the company who is responsible for managing all the finance and the accounting, preparation and publishing of the financial statements such as the balance sheets, cash flow statement and the income statements timely, auditing compliance and to coordinate in the preparation of the financial forecast of the company.

The role of every financial controller in different companies is not fixed, and it varies according to the size of the company and the staff working in the department and on the complexity of the operations of the company related to the accounts and finance. He generally acts as the head of the accounting and finance department of the companies.

Example of Financial Controller

There is a small company that appoints Mr. X as the financial controller of the company, who acts as the chief accounts officer as well, being the company is a small company. He has experience of 10 years in the field of accounting and finance in various companies in the same industry, and he is a qualified Certified Public Accountant (CPA).

He is given the responsibility of managing all the finance and the accounting related work of the company like preparation and publishing of the financial statements such as the balance sheets, cash flow statement and the income statements timely, development and documentation of the various business processes and the different accounting policies of the company to maintain the proper internal controls, ensure proper audit compliance timely and coordinate in the preparation of the financial forecast of the company. He has a team of 10 persons under him, to whom he has to guide and allocate the necessary work.

Mr. X, after joining the company, undertook the work of overseeing the preparation of the financial statements of the company and the other task allocated to him or that comes under his purview. He assigns the different work to different people in his team and asks for the proper reporting to ensure that the work is appropriately delegated to the concerned person. Along with this, he spends time and exchanges knowledge with the persons of the other department of the company to gather information about the company and to understand its working correctly. In the department of accounting and finance, various other departments are also related so, Mr. X ensures getting timely information from those departments so that the work of his department runs smoothly.

Financial Controller

Advantages

  1. They conduct the financial analysis of the company using the different parameters and gives the opinion on the same to the management of the company for further action.
  2. Apart from the management of the company, the financial controller guides the finance manager and the related persons on the way to perform the different financial activities in the organization as the financial control offers a base for the future financial activities.
  3. The financial controller, with the help of the various available tools, measures the variance between the actual performance of the company and the set standard performance. After knowing the deviations, appropriate measures to correct the same are taken by him.
  4. Maintaining a sufficient level of capital in the organization is an essential part of the effective management of the company. They ascertain the adequate capital requirement so that neither the funds should lie idle nor there should be undercapitalization of funds.
  5. The work for increasing the company’s productivity and efficiency, thereby growing the company’s financial strength in the long run;
  6. The financial controller performs the task of establishing the proper financial control in the company and appropriately executing the same.

Disadvantages

  • The financial controller is responsible for measuring the variance between the actual performance of the company and the set standard performance. Still, it is difficult for the financial controller to determine standard performance. Also, situations prevailing inside the company or in the environment may differ when the standards were fixed and when there is actual performance. In these cases, the standards will not be proper, and then there is no use of calculating the variances.
  • The financial controller performs the task of establishing the proper financial control in the company and its execution. Although establishing financial control may be easy, but it is challenging to implement the same appropriately. Also, the implementation of financial control tools requires a vast amount of money, making it a costly affair.

Important Points

  • The role of every financial controller in different companies is not fixed, and it varies according to the size of the company and the staff working in the department.
  • Apart from the size of the company, the role of the financial controller is also dependent on the complexity of the operations of the company related to the accounts and finance.
  • Generally, persons having a good and proven working experience in the other companies in the related field is appointed as the Financial controller.
  • They work to increase the company’s productivity and efficiency, thereby expanding the company’s financial strength in the long run.
  • It is required that the person taking charge should have a thorough knowledge of the various accounting principles and accounting procedures.

Conclusion

The Financial controller is the high-level executive of the company. He is given the work of overseeing the preparation of the financial statements of the company; compliance of the auditing, managing the cash flow of the company, establishing the proper internal control and executing the same, conducting the financial analysis of the company and giving the opinion on the same to the management of the company for the further action.

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