THE 5 QUESTIONS TO ASK YOUR CONTROLLER

epicor erp training during work hours

As the office of the controller becomes ever more strategic—creating higher levels of financial visibility to help drive growth and profitability—the financial organization’s relationship to the controller role must evolve as well.

Specifically: Today’s CFO needs to work closely with the controller to ensure that, one, the organization gets the full benefit of the controller’s talents and knowledge and, two, the controller’s office is operating at the highest levels of efficiency and accuracy.

Ask your controller the following five questions to initiate a conversation around best practices.

Q1: How many manual journal entries are we making during the closing process?
Q2: Have you reviewed compliance with local jurisdictions?
Q3: How long does it take to close our books? What’s holding things up?
Q4: Are we still using Excel? If so, why?
Q5: Can we integrate our financial information and our operating metrics?

Introduction

The new mandate for controllers—and CFOs

As the office of the controller becomes ever more strategic—creating higher levels of financial visibility to help drive growth and profitability—the financial organization’s relationship to the controller rolemust evolve as well.

Specifically: Today’s CFO needs to work closely with the controller to ensure that, one, the organization gets the full benefit of the controller’s talents and knowledge and, two, the controller’s office is operating at the highest levels of efficiency and accuracy.

Ask your controller the following five questions to initiate a conversation around best practices.

Q1: How many manual journal entries are we making during the closing process?

An excessive number of manual journal entries needlessly extend a closing period—and can also be a leading indicator of lurking problems. They can conceal anomalies and errors that actually have broad, systemic roots. You may be plagued with variable accounting processes—or a level of complexity that calls for revised standards.

To optimize the closing process and reduce the incidence of manual journal entries, you and your controller can consider implementing these best practices:

Key takeaway: Use audit difficulties and exceptions to identify areas needing policy definition, process improvement, and automation.

Q2: Have you reviewed compliance with local jurisdictions?

As one of the few people with a direct role in virtually every transaction that flows through the corporate accounting structure, the controller can—and should—play a central role in identifying and minimizing the company’s risk exposure. This is especially critical for growing companies, whose regulatory compliance risks steadily increase in magnitude and quantity over time. The following best practices can help your controller steer your company clear of unnecessary risks.

Key takeaway: Create a central review process to ensure the right controls are in place.

Q3: How long does it take to close our books? What’s holding things up?

The best measure of controller efficiency is how quickly and accurately the team closes the books. Start with strong planning and preparation, such as handling all billing and expense issues prior to the periodend. Automation is also essential—it provides the desired speed, efficiency, and accuracy without increasing staffing levels.

A fast close enables the accounting and finance team to move beyond merely reporting results and into forward-looking activities that can shape future outcomes. You and the executive team need financial information as soon as possible to make any necessary course corrections. This information includes traditional financial statements (income statement, balance sheet, and statement of cash flows) as well as operational reports and detailed analyses of business results.

Key takeaway: Create a central review process to ensure the right controls are in place.

Q4: Are we still using Excel? If so, why?

The continued use of Excel may reflect a sort of “inertia” based on inexperience with other tools, or just plain comfortable familiarity. While there are many reasons to limit Microsoft Excel use in corporate accounting—such as its inherently breakable models, security issues, and lack of shareability—it can still be useful to controllers in certain situations. Love it or hate it, Excel has been—and will likely remain—one of the go-to components in every accountant’s toolkit. Just make sure you’re clear on why you are using it.

Some of the best practices for using Excel include:

Key takeaway: Excel can be a valuable tool for specific, limited purposes.

Q5: Can we integrate our financial information and our operating metrics?

Because many financial systems can now accommodate analyses of operating metrics to create a richer, fuller picture of the business, the controller is assuming a role as the provider of financial visibility—once the domain of financial planning and analysis (FP&A) teams or the CFO.

Merging financial data and operational metrics could help your organization in the following ways:

Key takeaway: Implement a single reporting system to eliminate unproductive reconciliation time.

Conclusion

Exploring the answers to these five questions with your controller will help create a stronger, more effective financial structure. In fact, your entire organization will benefit from a finance team that understands and controls sources of financial risk, implements more efficient processes, and develops deeper insight into both the financial and operational metrics of the business.

Read the 2017 Buyer’s Guide to Accounting and Financial Software and Learn More About the Modern CFO’s Balancing Act.