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5 Key Questions to Ask Your Controller
The role of controller has become more crucial to driving growth and profitability through increased financial visibility. With this shift in mind, the organization’s relationship to the controller must also evolve.
Today, CFOs needs to work closely with their controllers to ensure that the organization gets the full benefit of the controller’s talents and knowledge and the controller’s office is operating at the highest levels of efficiency and accuracy.
Below are five key questions to ask your controller in order to initiate a conversation around new financial management opportunities.
Q1: How many manual journal entries are we making during the closing process?
An excessive number of manual journal entries can needlessly extend a closing period, in addition to being a leading indicator of other problems. Manual processes can conceal anomalies and errors that actually have broad, systemic roots.
To optimize the closing process and reduce the risks associated with manual journal entries, use audit difficulties and exceptions to identify areas needing policy definition, process improvement, and automation.
Q2: Have you reviewed compliance with local jurisdictions?
The controller has a direct role in virtually every transaction that flows through the corporate accounting structure, and therefore they 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.
In order to help your controller steer your company clear of unnecessary risks, it is crucial to create a central review process to ensure the right financial management controls are in place.
Q3: How long does it take to close our books? What’s holding things up?
The best litmus test for departmental efficiency is how quickly and accurately your accounting team closes the books. To ensure a smooth close, start with strong planning and preparation, such as handling all billing and expense issues prior to the period-end. Automation is also essential as 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. Today, executive teams need financial information as soon as possible to make any necessary course corrections.
Q4: Are we still using Excel? If so, why?
There are many reasons to limit the use of Microsoft Excel spreadsheets in corporate accounting—such as the inherently breakable models, security issues, and lack of shareability. The continued use of Excel may also reflect a sort of “inertia” based on inexperience with other tools, or just too much familiarity and reliance on old standards.
However, despite these inherent issues, Excel can still be useful in certain situations. Love it or hate it, Excel can be a valuable tool for specific, limited purposes. Just make sure you’re only using it for isolated tasks, or as an ad hoc tool for things like reconciliation reports and forecast modeling.
Q5: Can we integrate our financial information and our operating metrics?
Many financial management systems can now merge financial data and operational metrics to help controllers identify new opportunities, emphasize key operational metrics, and establish a centralized financial playbook to get the whole company on the same page. If you have two or more reporting systems, you will spend unproductive time reconciling differences and untangling conflicting definitions. Revenue may be reported differently for GAAP, sales compensation, and board reporting purposes but should all be sourced from the same system.
The key is to work with your controller to implement a single reporting system to eliminate unproductive reconciliation time
Exploring the answers to these five questions with your controller will help create a stronger, more effective financial structure. The entire organization will benefit from a finance team that understands and controls sources of financial risk through more efficient financial management processes.
To gain deeper insight into the financial and operational importance of asking these questions, check out the full whitepaper.