Key traits of new age Financial Controller. Evolution from just being an accountant to a true Business Leader. Step by step guide to ensure the journey towards being a valuable Financial Controller.

1. Changing Paradigm for Financial Controllers
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2. PREFACE
• Financial Controllership (FC) role is the second most important role in the Finance Department after the Chief
Financial Officer (CFO) / Finance Director (FD);
• Traditionally FC was supposed to just look after the Accounts, ensure Basic Tax Compliances and ensure that all the
financial information to the Statutory Auditors were provided on time. In short, they were merely treated as Book-
keepers;
• However, with the proliferation of the requirements of Finance being a “Business Partner” to all the other functions
in the business from being just a department to merely record transactions, the gambit of a Finance function and in
turn that of a FC has increased manifold and has thus grown into substantive importance;
• In this presentation we have tried to discuss the changing demands from a FC’s portfolio and how it can be the real
stepping stone for the higher things in a Corporate Life.

3. STRUCTURE OF THE PRESENTATION
• Modern Finance Department
• Roles expected from a Finance Controller
• Skills Requirements
• Conclusion

4. Modern Finance Department

5. Finance Department Pyramid
FC
Division
Reporting
Division
Commercial
Finance
Division
TraditionalModel–BusinessPartnering
ModernModel–BusinessPartnering
CHIEF FINANCIAL OFFICER

6. Finance Department Pyramid
• Finance Department is headed by a Chief Financial Officer (also called Director – Finance in some organization)
• The department is generally divided into three main functions
– (a) Finance Control Division
– (b) Reporting Division
– (c) Commercial Finance Division
• Size wise and work scope wise the Finance Control division in a Finance division is the one with the maximum strength
• Traditionally a Finance Controller was supposed to be more internal looking, concentrating mainly on the finance
function – ensuring integrity of the Books of Accounts with not much interaction with other functions of the
Organization like Marketing, Sales, etc. These interactions with the other functions were left to Reporting Division and
Commercial Finance Division of the Finance Department
• However now when Business Partnering is the new buzz-word across the entire Organization; it is expected from
Finance also. Further even in finance department it is now percolated down to Finance Control Division and even a
Finance Controller needs to do a lot of interactions with the Other departments in an Organization keeping overall
Organization objectives in mind

7. Roles expected from a Finance Controller

8. Basic Expectations
• Expectations from a Finance Controller (FC) varies from organization to organization depending on the size and the
complexities of the organization and also on the complexities and size of the finance department per se
• While in a large organization a Chief Financial Officer / Director – Finance (CFO) has an added advantage of a large
team and thus expectations from a FC is more compartmentalized and mainly restricted to Transactions and Internal
Controls; in a small organization the expectations from a FC are much more and is expected to perform almost all the
functions that a CFO needs to perform
• As CFO’s role is evolving outside the realms of finance and more towards Corporate Governance, Investor Relations and
other external relations; a CFO has to delegate all the work typically related to finance to its sub-ordinates. So while in a
large organization a CFO has the luxury of three big divisions– Finance Control, Reporting and Commercial Finance to
delegate, in a small organization a FC is expected to perform almost all
• In the following slides we would look upon the various roles that a FC is performing in a modern organization and it
would also show a glimpse of how the role has evolved over a period of time

9. Roles Matrix & Evolution
TRANSACTIONS
MANAGEMENT
COMPLIANCE
REPORTING COMMENTATOR
GOVERNANCE
COMPTROLLER
BUSINESS PARTNER
Traditional
Roles
Metamorphosis of
Traditional Roles
GRADUALEVOLITIONOFTRADITIONALROLES
GRADUALEVOLITIONOFMODERNROLES

10. Traditional Roles
• The most basic expectation from an FC is to perform the Transactions role to perfection
• As the role began evolving, other expectations started adding in the following order:
TRANSACTIONS
MANAGEMENT
COMPLIANCE
REPORTING
• Although the gamut of the Traditional Roles was increasing it was still more of internal Finance centric
• In the following slides let us explore what are the basic tenets of each roles in more details

11. Traditional Roles…..Details….
TRANSACTIONS
>> Maintenance of Books of Accounts – It involves maintaining the sanctity of the books of accounts by maintaining
controls over accounting transactions, orderly filings and keeping records
>> Maintenance of Bank and Cash Books – It involves recording of cash and bank payment and receipt entries and their
periodic reconciliations
>> Maintenance of Accounts Payable - It involves among others following basic duties - proper accounting of purchases,
recording of discounts, ensuring payments are made on time, keeping ageing of accounts payable updated to keep a tab
on expected claims and periodic reconciliations with the creditors to iron out issues, if any
>> Maintenance of Accounts Receivable - It involves among others following basic duties - proper accounting of sales,
recording of discounts, ensuring receipts are made on time, keeping ageing of accounts receivables updated to keep a tab
on payment terms and periodic reconciliations with the debtors to iron out issues, if any
>> Maintenance of Inventory System – It involves periodic stock taking, stock ageing, obsolete stock identifications and
proper provisioning in the books of accounts of the same

12. Traditional Roles…..Details….
TRANSACTIONS (continued)
>> Payroll accounting – It involves ensuring payment of payrolls on time and recording the same in the books with all the
audit trails in place
>> Transactional vouching to Statutory Auditors – It involves giving proper support to Statutory Auditors in their vouching
of accounting entries and books of accounts
MANAGEMENT
>> Management of Team of Accountants – Managing a team of accountants to ensure all the Transactions roles are
fulfilled
>> Management of Systems and Processes - Managing and setting up the internal controls, processes, policies and
procedures to ensure all the Transactions are performed with complete sanctity
COMPLIANCE
>> Internal Audits – Providing full co-operations to Internal Auditors and ensuring all their recommendations are
implemented
>> Laws, Rules and Regulations- Ensuring full compliance with Laws, Rules and Regulations of various Governmental
agencies, Income Tax, Listing authorities and other Regulatory authorities like Banking, Insurance, etc

13. Traditional Roles…..Details….
REPORTING
>> Periodic Reporting of Numbers – Periodic Closing of Books of Accounts and providing numbers to Financial Reporting
Division for further reporting purposes
>> Coordination with Holding company, Subsidiaries and Affiliates - Ensuring subsidiaries and Affiliates are closing in
time and then incorporating their numbers in Company’s books of accounts and then reporting those numbers to Holding
company consolidation in time

14. Metamorphosis of Traditional Roles
• Over the last two decades continuing globalization, advent of more and more stringent governance regulations from
regulatory authorities all over the world and the world getting closer because of internet means that Corporations are
forced to be more and more transparent and more open towards general public
• These have resulted in CFOs getting more away and away from the traditional finance roles and moving more towards
facing the analysts, investors and regulatory authorities, leaving the FCs in-charge of Finance department internally
within the Organization
• These led to evolution of each of the traditional roles into its modern incarnation:
Reporting Commentator
Compliance Governance
Management Comptroller
Transactions Business Partner

15. Metamorphosis …..Details….
Reporting ……….. Commentator
It involves moving away from just reporting “WHAT” to bringing out “WHY” in every reports. It includes liaising with other
departments in the business like Marketing, Sales, Human Resources, Technical, Operations, etc to bring out the non-
financial reasons in explaining the variances instead of just reporting variances to the Management who in turn needs to
present the same to the outside world, for e.g., Corporate Annual Report. So an FC needs to be able to oversee the
preparation of the entire Corporate Annual Report to ensure that the numbers and reasoning are speaking the same
language.
In summary, plain numbers reporting “accurately” has to move on to reporting “effectively” by including more and more
non-financial key performance indicators and providing more value-added commentaries and that too in a clear and
concise format.
Compliance ……….. Governance
Moving on from just ensuring plain compliance with regulatory requirements and various audits, FC in current
environment needs to be more strategic in thinking and needs to ensure that the controls and systems are robust enough
to adapt to fast changing environments without putting the integrity of the Organization at risk. He is the one who has to
lead the implementation of Enterprise Risk Management process to ensure that the Organization is compliant from future
existential risks also. continued…..

16. Metamorphosis …..Details….
Compliance……….. Governance continued….
It also involves dealing effectively and keeping Governance intact in the face of continuous changes of International
Financial Reporting Standards (IFRS), evolution of new business models, Mergers and Acquisitions (M&A) activities.
And the key to all these to make systems and processes, controls simple and meaningful for each and every stakeholder in
the Organization to adapt those in their daily lives and way of workings.
Management……….. Comptroller
With the world becoming one, the Organization is no longer confined to one building or one city or one state or even one
country, as it used to be. It is very common to see that different departments of an organization being situated in different
parts of the world. Research and Development (R&D) might be situated in one country with abundance of highly skilled
workforce, the manufacturing might be in a totally different country with abundance of cheap labor force. Similarly it is
very common to see that in big organizations normal day to day transactional accounting and reporting works being
outsourced to a country where it is much cheaper to maintain a team for these purposes. In these cases, an FC needs to
be rise above its accounting background and managing teams at one place and takes charge of all these diverse teams and
departments all across the world to ensure there is seamless connectivity all around. FC has to manage geographies and
diversities. Continued……

17. Metamorphosis …..Details….
Management……….. Comptroller continued….
All these has also necessitated that while earlier an FC needed to just manage a team of basic accountants to ensure that
all Transactional level processes and recordings are working fine, now an FC needs to manage a team of Technical experts.
An FC in the current environment is no longer “THE” subject matter expert but is someone who manages a team of “THE”
subject matter experts. An FC now no longer needs to get into technical minutiae but needs to ensure that all the checks
and balances are in place for the Technical experts in his team to tackle those. An FC, however, needs to have firm control
on the things going on and develop mechanisms of Key Performance Indicators (KPIs) and Key Responsibility Areas (KRAs).
Transactions……….. Business Partner
As noticed in our earlier discussion, an FC role is moving more and more away from the basic accounting (Transactions
level) and more and more towards Value creation for the Organization as a whole (Business Partner). This has led to
completion of the cycle of Metamorphosis of the Financial Controller role. An FC is now a Business Advisor and Integrator
who is supposed to provide critical insights and challenges to key decision making processes effecting the Organization as
a whole.
An FC now is no longer confined to his departments but is expected to know the heads and functioning of other
departments, know key customers and suppliers, manage the outsourcing partners, assist CFO in managing investors and
analysts; basically pushing the boundaries of Business Partnering. FC is a FRIEND to business from whom everyone wants
to get guidance and feedback.

18. Skills Requirements

19. Key Skills
• Traditionally an FC needed to just possess a degree in accounting who would then gradually rise over the years in
Finance department to become a Finance Controller. He would then needed to have basic Management skills to ensure
that the team is managed properly
• However, now because of changing nature of requirements the key skills needed apart from accounting knowledge are:
A) Organizational:
a) Strong Management skills
b) Attention to details and accuracy in delivery
c) Understanding importance of deadlines
B) Behavioural:
a) Ability to have bird’s eyes view and still have grip on processes and procedures
b) Flexibility and adaptability to fast-paced environment

20. Conclusion

21. Conclusion
• A Financial Controller is the second most important person in the Financial Hierarchy after the Chief Financial Officer
• To become a good CFO, you need to be a good FC first
• While the key skills required are mentioned in the previous section, what will help a person to be a good FC is to keep
mind open and always use “COMMON SENSE” at any given point of time
• Enjoy the challenges and give your best shot