There are a lot of different jobs within the accounting world. Most of the titles are fairly self-explanatory: accountants account for the accuracy of financial records, bookkeepers record transactions (a.k.a. keep the books), payroll managers manage payroll, etc.
However, if you look through a list of accounting titles and find yourself wondering “what is a controller?”, you’re not alone. Most people outside of accounting would have a hard time describing what a controller does.
In this post, we’ll unpack what one is, what they do, and what it takes to be one. Let’s start with the obvious question:
What Is a Controller?
Investopedia defines a controller as, “an individual who has responsibility for all accounting-related activities, including high-level accounting, managerial accounting, and finance activities, within a company.”
This is a fairly broad definition that we’ll unpack throughout this post. It’s difficult to have a precise definition of what a controller is in accounting because companies utilize the position in different ways depending on their size and industry. (In government and non-profit organizations, the role is often called a Comptroller.)
However, there are some general controller responsibilities that are fairly consistent no matter where you find them.
What Do Controllers Do?
Investopedia’s article goes on to provide a pretty good summary of the typical duties of a controller:
- “A controller acts as an overseer of a company’s financial health.
- Depending on the company’s needs, a controller may also be responsible for hiring and training staff who will work in the financial department.
- controllers are not only responsible for calculating the bottom line but for meeting tax, permit, and licensing requirements.”
Their role within an organization goes far beyond simply “crunching numbers.” They are responsible for overseeing not only how those numbers get recorded, but how they are interpreted.
Other responsibilities a controller may find themselves doing include:
- Developing and Implementing policies and procedures
- Designing organizational structure within the accounting department
- Establishing budgets
- Providing inventory oversight
- Creating internal financial and accounting systems
- Providing risk management
- Assisting with strategic planning
Is a Controller Involved in Financial or Managerial Accounting?
Yes.
They spend a significant portion of their time looking at financial records and reports. However, they also supervise other accounting roles such as accountants, bookkeepers, and payroll managers.
They are responsible for managing that office and maintaining a “30,000-foot view” of the company’s financial fitness. A good controller’s analysis can also help company leaders make better decisions. Therefore, they need to be able to work well with both numbers and people.
The outdated stereotype of an accountant is someone who is introverted, detail-oriented, and enjoys spending time with spreadsheets. A controller must be able to operate within that kind of world, but they must also at times be outgoing, convincing, motivational, and willing to take charge.
Controller vs CFO
Many people may read the definition of a controller above and wonder, “What is the difference between a controller and a CFO?” And that’s a valid question. The job descriptions sound very similar in many ways.
A CFO is an executive position primarily charged with using data to predict the company’s future financial position and using that information to advise senior leadership on the best strategy for guiding the company to growth and success. The controller is the person who is basically responsible for maintaining all that financial data so the CFO has accurate information to work with.
In larger companies where there is a dedicated accounting department, the controller reports directly to the CFO. But in smaller companies, the two roles may be combined. When the accounting office is basically a one (or two) person operation, the controller effectively is the CFO with a different title. In that case, the controller would report to the CEO. It really all depends on the needs of the organization and how large the staff is.
Does a Controller Have to Be a CPA?
While the vast majority of corporate controllers choose the traditional route of earning their CPA certification, it is possible for a controller to arrive at the job through less conventional routes.
An article titled “No CPA, No Problem” over at GoingConcern.com highlights several individuals who have found their way into becoming successful controllers without getting their CPA.
Many of them have chosen to pursue a Certified Management Accounting (CMA) designation instead. It equips individuals more for a career in strategic management and business growth as opposed to the CPA track that focuses strictly on numbers.
Others combined a CMA with a Certified Financial Manager (CFM) title. Both are sponsored by the Institute of Management Accountants and provide a lot of credibility to those who are looking to become controllers or eventual CFOs.
Additionally, many of the controllers interviewed for that article opted to get an MBA in graduate school in order to be able to “look at the organization from a broader view, not just the debits and credits.” They still stress the importance of understanding the bookkeeping processes, though, as that helps good controllers better evaluate the final numbers.
Controller for a Construction Company
At CRS CPA, we do a lot of work for clients in the construction industry. Recently we’ve written several blog posts specifically for people who are contractors or own construction businesses.
Because construction accounting is so different from accounting in any other industry, being a controller for a construction company can be especially challenging and rewarding. In this type of position, a controller’s main job is to accurately predict cash flow for future projects, expenses, and taxes.
By overseeing the company’s accounts receivable and accounts payable, they are in a key position to be able to provide objective and up-to-date job costing. As anyone in construction knows, having reliable information for each and every project you’re working on (often several at once) is essential to whether your company succeeds or fails. A good controller is a critical part of a contractor’s team.
Not Ready for a Full-time Controller or CFO? We Can Help.
We regularly tell our clients to “expect more from your CPA.” One of the ways we do that is by providing Part-time CFO & Consulting Services.
Many of the tasks we’ve described in this article can be accomplished by our team when you’re not quite ready (or able) to have one in-house. So whether you have a small accounting team as part of your staff or you’re still doing it all yourself, schedule a call to learn more about how we can help.
