The Evolving Role of the Controller

November 18, 2022 Theresa Rex

finance controller studying about his evolving role at computer

Anyone who has spent about 20 minutes scanning today's job boards online will see a lot of titles they don't recognize. There's the legitimately in-demand (think senior blockchain analyst) and then there's the linguistically and professionally dubious (what is a chief troublemaker anyway?) In fact, it's gotten so it's the conventional roles and traditional titles that tend to stand out. Financial controllers, for instance. Keep on reading to learn about how the role of the controller is evolving.

The controller role is practically as old as business itself, necessitated by the need for accurate record-keeping and tasked with acting as the steward, manager and operator of company assets. An accomplished accountant and efficiency expert, controllers have been keeping accurate tallies and reconciling balance sheets since at least the 15th century. And while the core of the job remains central to ensuring the success of a business's finance function, the way it's applied has come a very long way thanks to the evolving role of the controller.

Today, we're digging into what makes a successful financial controller today, how those competencies and characteristics have changed and what this expanding role could look like in the future.

The Main Functions of an Evolving Controller: Then & Now

controller reviewing new functions of IT department

The responsibilities of corporate and finance controllers (as well as their public counterparts in comptroller's offices at every level) are oriented to the north star that's right there in the name: they're primarily concerned with ensuring the integrity of the internal controls of the finance function and company overall.

As finance leaders, they are almost always CPAs and come to their roles as experts in financial fundamentals with bona fides in tax, auditing, compliance and good governance. Controllers are not trading those bona fides in, of course, but they are striking an ever-finer balance between this "old" conceptualization of the role and the "new" directive to act strategically in FP&A.

On the CFO Weekly Podcast: From Tax Pro to Finance Leader: Becoming a Corporate Controller

To understand the evolving role of the controller, it helps to understand what controllers were traditionally tasked with as part of a company's senior leadership team and juxtapose it against the demands of modern controllership:

Then: Finance Fundamentals & Routine Reporting

Put very simply, the controller is the chief accountant within a company. And as with the accounting profession as a whole, the focus of the work they do and the skills required to do it well have shifted from primarily transactional to increasingly strategic.

Read more: 5 Reasons Why Choosing the Right Finance KPIs Really Matters

Of course, these traditional responsibilities are still core to modern controllership, but the way controllers approach and execute them — and the outcomes they enable — have changed:

  • Accounting oversight: It's traditionally fallen to the corporate controllers to generate income statements and maintain the chart of accounts, process payroll, supervise accounts payable and receivable and close the books.

  • Manage risk & safeguard cash flow: Debt management and collection, invoice approval, monitoring bookkeeping processes and internal audits all fall under the umbrella of traditional controllership, alongside regular reporting on the organization's financial health.

  • Governance & compliance: Internally and externally, controllership has been and remains concerned with maintaining the integrity of the books by implementing and monitoring preventative and detective controls. They oversee internal audits and act as the point of contact for external ones, ensuring compliance to GAAP standards, legal guidelines and company standards.

  • Daily operations: Finally, controllers have supervisory responsibilities as managers of the finance team and overseers of the processes that drive the day-to-day work of the finance function.

Now: A Role Supported by Technology and Driven by Data

As the finance function is increasingly recognized as a potential driver of value, the controller's role — like the CFO's — has become more strategic. We'll explore why that is in the next section, but it's not possible to outline what controllers are expected to take on as strategic business partners without talking about technology.

Many of these "new" responsibilities are the result of technological advancements, which have impacted every aspect of modern controllership and require digital skills to execute effectively. Process automation, universal ledgers and data visualization tools have all had an outsized impact on how — and how efficiently — controllers work in the space of less of a decade.

They're also a significant factor in why the modern controller is:

Tech savvy & data-driven: The ability to make data-driven decisions has required accessibility to the data in question — data that is clean, accurate and current. Taking processes associated with that data out of the silo and putting them into finance leaders' hands is also critical.

Process improvers: Controllers have been tasked with driving efficiency in the finance function, and that means taking the lead on efforts to automate or optimize manual or edit-prone tasks and refine the processes they reside within. Often, to enable this long-term and continuous optimization, controllers will be tapped to lead digital transformation initiatives within the organization.

Talent developers: The modern controller also manages and stewards human capital, working to recruit and retain qualified accounting talent on the teams they supervise. Often, they collaborate with other senior leadership to shape the talent strategy of the entire organization.

Strategic planning partners: Allocating capital strategically has broadened the scope of the controller role immensely, providing guidance on how to apply trend and forecast data to the operational distribution of cash.

Flexibility & adaptation: As stewards of a company's assets — whether it's their cash, people or time — controllers have become change leaders and must remain flexible and adaptable in their approach.

How Controllers Became Strategists and Business Partners

controller working on new finance strategy with business partners

So, how — and why — are today's controllers so far afield of what was once a purely tactical and transactional directive?

Among their fellow executives, finance controllers are something of an anomaly. They tend to fly under the radar and stay out of the C-suite spotlight, but even as an unseen force, they drive much of what makes an organization successful with their work — work that often requires the ability to be creative as a collaborator at the strategic table and maintain practical expertise with an objectively analytical approach.

The answer, as always, is that there is no one event or cause that serves as an origin point for the expanding role of the corporate controller. Technology certainly plays a part: 96 percent of controllers say it has had a major impact on the controller role. This technology runs the gamut from close management software to the proliferation of process automation and cloud-hosted ERP.

In many ways, the technology that enables process optimization and detailed reporting in real-time has allowed controllers to shift their attention away from these traditionally time-consuming tasks and focus on judgement-based accounting that has transformed the finance function into a driver of value instead of a center of cost.

Another major catalyst for the change? Transformation occurring higher up the chain: the evolving role of the CFO has warrants evolution for the second-in-line.

Read more: How the CFO Role Has Evolved: Becoming a Comprehensive CFO

The CFO's role, too, continues to shift toward the strategic, requiring them to delegate some of what was traditionally standard to their role to their second-in-command. In fact, according to controllers themselves, the evolving role of the CFO is the single cause directly tied to the evolving role of the controller — 73 percent pointed to CFO task backfill as the cause of the expansion. It certainly explains how controllership has become a collaborative endeavor through widespread torch-passing.

But even that doesn't bring the full picture into focus. Changes to compliance and reporting standards — not to mention tax law — keep controllers plenty busy as they work to stay aligned to their original north star and keep current on new standards, often under more scrutiny than ever before.

At the same time, 50 percent of controllers say that "difficulty in recruiting and retaining talent" is behind their growing to-do list and focus shift as straightforward hiring processes and standard managerial practices yield less fruit than they once did, requiring controllers to make the jump from team leads to talent developers.

Read more: 2022 Talent Market Outlook: The War for Talent After Covid

These factors and more — economic shifts, new mindsets and yet more technological advances — are bound to continue to shape the future of controllership and the skills and expertise of those in the profession.

Taking on a Leadership Role — From Tech to Talent, The Role of Controller is Evolving

Controller talking to department about new tech and talent acquisition plans

While changes to any role — especially when coupled with increased demands on time and attention — have the potential to be overwhelming, they also have the potential to generate opportunities.

Controllers may find themselves well-positioned to influence the direction and outcome of the organizations that employ them, as they're increasingly perceived not as "number crunchers" but as catalysts for transformation and architects of company growth. Working as a controller before getting promoted to CFO is hardly unheard of, and the changes we've discussed here certainly appear to be equipping the next generation of climbers.

Whether or not they're bound for the C-suite, controllers today have a guiding hand on more aspects of a businesses' drivers of success than ever. They've become technology experts, data storytellers and strategic partners in finance. They're poised to lead through even more transformation that will touch everything from talent to technology and potentially finance itself.

For nearly four decades, Personiv has helped finance leaders inside the C-suite and out to evolve with the changing face of finance. With our custom virtual accounting solutions, we bring GAAP-compliant top accounting talent to the table, empowering controllers to shift their focus to the newly strategic initiatives they'll be tasked with overseeing.

See how we do it when you check out our solutions page, and then get in touch with one of our outsourcing experts to get started.

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