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How the role of financial controller is evolving

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Financial controllers step up as strategic guides in an era shaped by technology and sustainability.


In brief

  • Financial controllers now need strategic, technological and analytical skills to steer corporate strategy beyond traditional reporting and compliance.
  • Embracing digital tools and integrating ESG principles into financial strategies are essential for modern financial controllers.
  • Controllers should be continuous learners, ensuring data security and compliance across global markets to be effective strategic partners.

Financial controllers face a landscape that hardly resembles that of a decade ago. New technologies and data analytics tools, alongside the rising prominence of environmental, social and governance (ESG) factors, have added a new dimension to corporate strategy. Financial controllers are finding their traditional roles, once heavily focused on historical financial reporting and compliance, now require a significant expansion in scope and skills.

“The role of the controller is expanding beyond traditional accounting; it now demands a proactive, forward-thinking approach, embodying the role of a strategic business overseer. Today's controllers require a diverse skill set, they must be adept in accounting while also possessing the skills to navigate data, engage in strategic business discussions and serve as trusted advisors. The position has evolved to one of orchestrating and safeguarding value realization, placing them at the heart of the financial strategy,” says Raghvendra Singh, EY Asia-Pacific CFO Advisory Leader.

The heightened importance of predictive and real-time reporting has largely driven this shift. The function isn't just about controllership anymore but also encompasses aspects of financial planning and analysis (FP&A). In the past, the controller's role was primarily transactional and internally focused. However, technological changes and business expectations are prompting a shift toward a more extroverted role.

“The challenge comes in the form of the skill sets. Many controllers are accountants first, not necessarily experienced with technology. The future will be even more automated than it is today as generative AI continues to transform how finance works. That requires controllers to be comfortable with data and technology to drive finance transformations and be able to build those capabilities in their teams,” says Kathy Denardo, EY Americas Accounting Compliance and Reporting Leader.

Integrating ESG considerations into financial strategies

 

The role of the financial controller is increasingly intertwined with ESG principles. As these considerations become more central to corporate strategy and risk assessment, controllers should incorporate them into the financial planning and reporting processes. This must be aligned with sustainability goals and should be communicated to the stakeholders.

 

“It's exciting to see companies now hiring ESG controllers, putting the controllership at the forefront of this critical strategic initiative. With assurance being required over reporting, controllers are in a key position to lead the way for the company. This is a significant change from the past when statutory reporting or similar regulatory reporting would not have been the top priority of many corporate controllerships,” says Denardo.

 

Knowledge of non-financial reporting frameworks, such as those established by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), is becoming essential. These frameworks guide the measurement and reporting of a company's sustainability performance, areas for which controllers are now responsible.

 

As businesses operate in a more interconnected world, financial controllers need to navigate a labyrinth of international regulations and reporting standards. The challenge is ensuring compliance with diverse regulations across markets and maintaining a harmonized approach to financial management that adheres to global standards and local regulations. Controllers should exercise due diligence and maintain an informed global perspective to safeguard the company's cross-border operations.

 

“The controllership function should adopt a globally local operating model, utilizing centralization to drive value while facilitating locally supported compliance, resilience and risk management. This should be a new operating model for controllers that balances shared services and business partnering functions while keeping compliance functions centralized. To effectively evolve, the controller's role must incorporate approaches that leverage technology and data for simplification and harmonization while maintaining a supportive local presence for compliance and risk management,” says Singh.

 

In an era where data breaches can decimate a company's finances and reputation, financial controllers are the custodians of financial data security. The confidentiality of financial information is paramount and the controller's responsibility extends to ensuring robust data governance and cybersecurity measures are in place. “The risk management, the agility and the scale of change happening in the market is significantly bigger and faster compared to several years ago,” says Denardo.

 

The volume and velocity of financial data in the digital age make maintaining accuracy in financial reporting more complex than ever. Controllers must ensure that financial statements are error-free and provide an accurate and fair view of the company's financial situation. With the pace of change in technology and regulation, financial controllers should commit to continuous learning and skill development. They need to anticipate future trends and challenges, adapting their practices and knowledge base to remain effective and relevant.

The expanding universe of controllership

The financial controller's role has evolved to include a more significant contribution to strategic decision-making. They are increasingly involved in guiding investment strategies, managing risk and identifying areas for growth. Financial controllers are becoming chief architects in shaping the business strategy, tasked with steering their companies through the uncertainties of the market with a firm hand on financial levers.

The traditional path from the controller to CFO is transforming as well. Now, controllers are seen as potential Chief Value Officers, a title reflecting their broadened influence over creating and preserving value across the organization. “Having a vision and cascading it down to your team is crucial. Financial controllers can't be isolated; they need to drive strategic vision within the finance function. Financial controllers should strive for a seat at the table to voice their insights and drive change, which is a critical skill,” says Simone Moretti, Asia-Pacific Managed Services Associate Partner at Ernst & Young LLP Australia.

With digital transformation, financial controllers are now the vanguards of technological assimilation within the finance function. Gone are the days when their primary concerns were ledgers and compliance checks. Today, they must exhibit a command of advanced financial software platforms. These systems streamline financial operations and open doors to in-depth data analysis, providing a granular view of the company's financial health and enabling predictive insights.

“The controller needs to become a native citizen of technology. They need to have an open mind, curiosity and the ability to apply new tools, available functionalities and technologies, but also be skeptical enough to select which technology makes sense for their company and their specific situation,” says Vaida Lapinskiene, EY Asia-Pacific Accounting Compliance & Reporting Leader.

Controllers should develop a dual expertise: a thorough understanding of financial fundamentals and proficiency in data analytics. These competencies enable them to convert complex data sets into straightforward intelligence that can inform and shape strategic business decisions.

They are now central players in crafting corporate strategy, driving innovation and ensuring ethical governance. Financial controllers have a pivotal role in guaranteeing that their companies prosper financially and contribute positively to society and the environment.

Controllership today represents not just a set of tasks, but an overarching dedication to fostering sustainable business practices and upholding the integrity of financial reporting. In doing so, controllers secure their place as indispensable advisors in their organizations, poised to navigate the complexities of the modern business world.

“The controller's role has transformed significantly; from being a traditional accountant, they have evolved into ‘value articulators’ – a custodian of value realization who assesses whether investments deliver their financial promises. No longer just transactional, today's controllers are data and tech-savvy forward-thinkers, essential for guiding the right decisions, ensuring compliance and driving the organization toward resilience and growth,” says Singh. For example, if the corporate controller of a US$25b energy company initiating a finance transformation saw her team’s future as including more active partnership with their pricing teams on managing revenue, versus just reporting on revenue, given the team’s in-depth understanding of how the company generates revenue.

As the digital landscape continues to evolve and ESG criteria becomes critical, the financial controller's role will continue to expand. These professionals are at the helm, steering the finance function through transformative times with a steady hand and a clear vision for the future.

How to prepare for the future of controllership

  • Upgrade your skill set: as a financial controller, actively pursue knowledge in data analytics and advanced financial software platforms to enhance your strategic decision-making capabilities.
  • Embrace technological proficiency: dive into the latest financial technologies and tools, and be discerning in choosing the right ones that fit your company's needs to stay ahead in automation and predictive insights.
  • Integrate ESG principles: familiarize yourself with non-financial reporting frameworks like GRI and SASB to incorporate ESG considerations into financial strategies, ensuring alignment with sustainability goals.
  • Maintain global compliance awareness: keep abreast of international regulations and develop approaches to maintain compliance while harmonizing financial management across different markets.
  • Prioritize cybersecurity vigilance: prioritize financial data security by implementing robust governance and staying updated on the best practices in cybersecurity.
  • Commit to continuous learning: commit to lifelong learning to adapt to rapid changes in technology, regulation and global business practices.
  • Engage in strategic business involvement: seek active participation in corporate strategy discussions and investment decisions, positioning yourself as a chief value officer and a vital business partner. 

Summary

The role of financial controllers has significantly evolved from a traditional bookkeeping job to one that is central to strategic decision-making, incorporating advanced technologies, data analytics and ESG principles into their work. With a focus on continuous learning and embracing digital transformation, they are pivotal in steering companies toward sustainable growth and ethical governance, positioning themselves as vital architects of corporate strategy and value realization.

 

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