The role of financial controller has moved way beyond number crunching. Increasingly, controllers are taking on the job of financial operating officer. They are becoming the CFO’s go-to source to ensure that finance runs smoothly and there are no surprises at quarter end.
But leading a smoothly running finance department is a given. Today’s financial controllers must do more. They must be forward-looking. They must always be searching for ways to improve productivity, reduce costs, and streamline processes—including quote to cash, purchases to payables, the month-end close, consolidation, management, and financial reporting. They must also scale these processes to handle high growth.
Navigating the financial obstacle course
Chances are that those added responsibilities don’t come with added resources. Outdated, disparate financial systems can’t provide finance leaders with the real-time information needed to adapt quickly to market changes. In addition to accurately stating results, reports must tell a story.
The good news is that many financial controllers have successfully met these challenges using financial analysis software, and in the process, have made themselves strategic business partners to the rest of the organization.
Let’s look at the six best practices that today’s best-in-class controllers follow.
Practice #1: Top controllers cut risk by cutting spreadsheets from their close
The most effective controllers know that spreadsheets are the wrong choice for managing consolidation and close related processes. These controllers are building workflows; automating reconciliations, allocations, intra-company eliminations; and importing data from multiple ERP systems.
They’re minimizing errors due to manual entry, creating standard, repeatable processes, and reducing risk. With the time they save by automating, they have more cycles for the strategic analysis they’re now expected to provide.
Practice #2: Top controllers use automation to close faster
Despite the general expectation that companies should be able to close their books within a week, many organizations don’t achieve that goal for their quarterly or annual close. Most companies have a long way to go before they achieve a “virtual close,” in which fully integrated financial applications and ERP systems enable real-time financial statements, on demand.
The top controllers in today’s best run companies overcome these challenges by transforming processes altogether, and making use of technology and people to maximize their efficiency. They streamline and automate key close tasks like consolidation and reporting with cloud-based applications. Because these applications reside in the cloud, they’re easier to deploy, use, and manage.
By automating processes and eliminating manual tasks, controllers can allocate their personnel to more value-added activities.
Practice #3: Top controllers lead with data and analysis to elevate their function beyond closing the books
Increasingly, controllers are being asked to provide not only financial data but budget and operational information as well. They do more than simply compile packages of reports—they interpret the data and contribute to decision-making.
Best-in-class controllers automate their reporting processes with self-service tools so they can analyze data without needing a programming degree. They use visual analytics and scorecards to identify patterns in prior-period trends. Reports provide relevant key performance indicators (KPIs) and interactive dashboards that can be consumed across the entire organization.
Practice #4: Top controllers pursue a culture of self-service
Even more efficient reporting doesn’t eliminate the fact that controllers are becoming de facto information sources for both financial and nonfinancial managers. According to the IMA, more than 90% of controllers are being called upon to provide operational data, and many are being used to source business performance and customer data.
The best understand that pulling reports for others takes them away from more value-added, strategic activities. So, to deal with the onslaught of requests, these people are enabling key stakeholders and business users with self-service reporting and dashboards.
Practice #5: Top controllers ensure a seamless handoff of consolidated financials to FP&A
Top controllers deploy business systems that integrate budgeting, planning, consolidation, reporting, and analytics into a single application that can be used by both accounting and FP&A. In the Adaptive Insights CFO Indicator Q3 2015 report, 38% of the global CFOs survey respondents said their organizations had achieved a single source of truth, while 45% said they were working toward a central repository for financial performance data.
A single system makes it much easier to move from close to planning and analysis, because everyone is aligned around the same data.
Practice #6: Top financial controllers enable collaboration among a decentralized team
Finance departments are more decentralized now than ever before, but accountants still need to collaborate around the close process. Centralized, hard-to-access systems stand in the way of collaboration, as do poorly defined schedules and weak commitments to deadlines.
The best controllers manage their distributed teams by carefully balancing leadership and project management. They create a consistent close schedule that reduces bottlenecks, minimizes surprises, and promotes a culture of unity. A consistent schedule also allows the team to deliver information more quickly.
Our CFO Indicator Q4 2016 report reveals that while 85% of CFOs say their teams have direct access to the financial and operational data needed to generate accurate reports, it is the non-value-added tasks—like data gathering, verifying accuracy, and formatting reports—that take time away from the strategic analysis desired by top management and other stakeholders. Most CFOs also cite data integration as the biggest technology hurdle to gaining actionable reporting information, given the increasing need to report on both financial and operational data typically housed in disparate, unconnected systems. Read our other CFO Indicator reports here.