What is a Controller?

A controller is like an assistant coach of a sports team…

In sports, a head coach is the top official of the large group of people who try to help a team win. Assistant coaches help the head coach oversee the team's training of players and other activities, often specializing in particular areas. A controller is like an assistant coach, specializing in a company’s accounting and financial information and helping the “coaches” above them - the chief executive officer and chief financial officer - run the company from a financial perspective.

A controller is a senior official at a company who oversees its accounting department and the information about its financial performance and health. They are in charge of preparing financial statements that outline the company’s current financial situation and financial reports that project and plan for its future.

The controller ensures the company’s financial reporting complies with accounting rules. All financial statements, like balance sheets, income statements, and cash-flow statements, must follow the prevailing system of accounting guidelines used by organizations in reporting their financial numbers - generally accepted accounting principles (GAAP) in the United States, International Financial Reporting Standards (IFRS) in most other countries. The controller also makes sure the company’s financial statements meet applicable legal and regulatory requirements, such as a public company’s obligation to file its financial statements with securities regulators and disclose them to investors in a timely fashion.

Controllers also advise a company’s management on strategies to maximize its profit. For example, a controller can advise on the best ways for a company to price its products in the wake of different types of taxes used in different states and countries, such as value added taxes (VAT) (applied at every step of a product’s supply chain) and sales taxes (paid by customers when the product is sold).

Controllers typically have significant experience and training in accounting and finance. They often obtain professional designations such as the certified public accountant or certified management accountant certifications.

A controller’s responsibilities can vary depending on factors such as a company’s size, industry, business model, and applicable regulations. However, they can be grouped into accounting, auditing, and budgeting.

Controllers oversee accounting company-wide and the preparation of the company’s financial statements and reports. They may be the top accounting officer at small companies and non-profit organizations, but at larger companies they often report to a chief financial officer (CFO).

The controller manages the company’s accountants who do the work of collecting financial information from across the company, using it to prepare the company’s financial statements, and making sure they’re accurate. The controller also supervises the accounting process, the steps by which the company prepares its financial statements for fiscal years — the 12-month periods used by organizations for their financial reporting and budgeting.

In addition, the controller supports a company in developing accounting processes needed to support new business lines and investments in which regulations and guidelines are still being developed — even when the business lines are so new that guidelines don’t yet exist, as with the space-tourism industry or bitcoin when they began.

The controller ensures that the company's financial statements are accurate and implements internal controls to help safeguard their accuracy. Controllers also coordinate audits — reviews of the financial statements to double-check them — by both the company’s own internal auditors and its independent, third-party auditor.

Controllers also oversee the company’s compliance with regulations and its relationship with regulatory bodies that keep an eye on aspects of its finances - like the Securities and Exchange Commission (SEC), which monitors the financial statements and disclosures of publicly traded companies, and the Internal Revenue Service (IRS), which checks business tax returns.

Controllers direct the process by which a company prepares its budgets, forecasts, and other types of financial reports that look forward instead of back, as accounting and auditing do.

For instance, a company’s executives may want to see projections of future cash flow, so they can tell how much cash would be available to finance a major purchase. Investors and financial analysts may want to know about the company’s projections for future earnings, or a lender may want forecasts of its financial situation to see if it’s a good credit risk for a loan.

Controllers can help provide all of those types of reports. They can also monitor variations from the company’s budget and investigate budget deficits — instances in which the company’s expected income is less than its expected expenses during a period.

A CFO is a more-senior official than a controller. The CFO is the principal official in charge of all of the company’s financial affairs and decisions.

The controller reports to and advises the CFO, carries out the CFO’s decisions, and oversees the company’s accounting day to day. At smaller companies, however, a controller may also take on the responsibilities of a CFO.

Controllers typically are experienced accountants. Companies generally require controllers to have at least five years of accounting work experience. Some companies require eight to twelve years.

Comptrollers and controllers have the same job description, but controllers work for companies and comptrollers work in the public sector, for government entities and other institutions that aren’t for-profit companies.

Typically, a comptroller directs the accounting department of a local, state, or federal government, non-profit institution, or educational institution. For example, the Hawaii Office of the Comptroller oversees the accounting activities of the state of Hawaii’s Department of Accounting and General Services.

The term “comptroller” originated from a 15th-century translation from the French word contreroelleur into “conterroller.” English speakers eventually modified “conterroller” into the current “comptroller” to match the term compte (“account” in French).

Controllers must typically have at least a bachelor’s degree in accounting or a similar field like finance or business administration. They must have five years or more of work experience in accounting or a related financial field, and generally they have achieved a professional designation like the certified public accountant (CPA) certification. They must keep abreast of developments in financial reporting from the SEC and other government agencies.

Hiring a controller is necessary when your business or organization has several partners, has a board of directors overseeing its work, or experiences dramatic growth. Those factors create financial reporting and compliance requirements for the company, and a controller has the skills and knowledge needed to address them.

At a small business or small joint venture, a bookkeeper may suffice, but mid- to large-sized companies would benefit from the comprehensive oversight that a controller provides for a company’s accounting and related activities.