What is Financial Controller? Definition of Financial Controller, Financial Controller Meaning and Concept
The financial controller, in the business sphere, is the person responsible for the financial control and management of the company. Its main mission is to establish a control plan on the different projects of the company, to know what the line of action will be based on how each one is progressing.
These control plans basically consist of making a comparison of the company's actual results (usually past results) with respect to budgets and future forecasts. It mainly translates into a control of the company's costs.
This is of great help for the company, since it allows to know if the project is going according to the forecasts, if these are worse than the real results or are better. And in this way, with the analysis of this data, the financial controller can develop improvement plans, which will be applied to future projects of the company.
Over time, the financial controller has become a fundamental figure in any company, going from performing only financial tasks to performing general functions of the company.
Functions of the financial controller
The functions of the controller vary depending on the size of the company. In small companies, it usually performs, in addition to those of management control, accounting and finance tasks. In larger companies, there is usually a specific management control department.
The main functions of the financial controller are:
- Design and control accounting systems (both financial accounting and cost accounting). In order to be able to analyze them and facilitate decision-making. Optimize cost management and support the implementation of accounting programs.
- Design the information and management system of the company.
- Prepare and keep updated business planning and control systems.
- Analyze and control the profitability of the company and the productivity of the employees. To do this, detecting and communicating possible errors and improvements.
- Design work procedures and supervise their correct compliance.
- Document and communicate to both the management and external agents (shareholders, auditors, etc.) the key aspects of the management of the company.
- Design and maintain dashboards. Collaborate with senior management in strategic and investment decisions.
- Support the management in coordinating the rest of the functional areas.
The financial controller in project management
On the other hand, when facing new projects, the tasks of the financial controller can be divided into three phases:
- The phase prior to project execution : In this phase, the controller must develop control plans and establish forecasts. It is usually the most important phase, because any previous errors will carry over into the following phases and will distort the final conclusions.
- The phase during the execution of the project : In this phase, the controller must check and verify that the forecasts are being met, by comparing with the first results. Depending on the deviations that occur, in this phase decisions can be made to apply immediately and correct possible imbalances.
- The post-execution phase of the project : Once the project is executed, the controller must analyze the results and verify deviations from the forecasts. Once the results have been analyzed, you must make the reports or reports of the project, where the entire process that has been carried out (control plan, forecasts, modifications, final results, deviations) will be reflected. These reports are delivered directly to the Direction or Management of the company.
The importance of the financial controller in the modern company
The old control systems were limited only to operational control through cost accounting systems and ignored any type of planning. In the new management control systems, in which planning and control acquire greater importance and where there is greater integration between all elements of the company, the existence of a financial control post is necessary.
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