What is controller accounting?

In most companies, the Controller is a senior officer who must report to a committee of non-financial managers. This group is known as the Board of Directors or the Executive Committee and it approves major financial policies and business strategies.

Responsibility of controller

The controller is responsible for producing accurate reports about how much money a company has, where that money came from and what its current state is. All told, this position requires superb analytical skills along with an ability to speak clearly and persuasively about complex numbers.

These skills may be simple on paper but they are difficult enough to master without distractions such as meetings out of nowhere or unreturned phone calls. At times, controllers may even have to deal directly with disgruntled customers who believe their bills should be lower than they are.

Basic purpose of controller

As the controller is forced to juggle many responsibilities, one function that often suffers is internal control. The need for accurate records and steady cash flow makes external financial controls more important than ever, but it’s difficult for controllers to establish these concepts when they have so much else on their plate.

Unfortunately, failing to provide suitable oversight may result in increased risk of fraud, which could mean trouble not only with regulators but also with your board of directors. Fortunately, the trend towards increased outsourcing may help relieve some of this pressure.

Controller as a welfare for people

Lastly, it’s important for people who might want to become controllers to know that they will often work long hours during busy seasons of the year. During these times, it’s more important to prevent errors than worry about sticking to a set of arbitrary rules. For example, if a department head forgot to file an expense report before the month ended, it would be better for them to slip up then and there rather than have that person wait until the following month.

Who is the best accountant?

The best accountants are those who have specialized as cost accountants. They should be able to forecast costs accurately, which means that they should know all the details about production and selling methods. The study of deductive accounting is recommended for those who want to become general accountants; it deals especially with making income- and property- tax reports and with auditing.

Read More: All you need to know about Anchoring Construction

Purpose of accountants

By contrast, accountants are usually assigned to perform specific tasks for which they are fully responsible. For instance, you might be assigned the task of preparing year-end financial statements. This means that whether your team finishes on time or not is entirely up to you.

Accountants also operate within a world of numbers and spreadsheets instead of meetings and conference calls so it’s easier for them to devote 100% effort when they’re in the office. Rather than work with internal customers, accountants report their findings directly to management. While controllers answer only to the board of directors.

Accountant’s work

An accountant’s work involves mostly arithmetic, although he also studies financial reports in order to be able to interpret them properly. Accountants are usually classified as either “general” or “specialized.” The general accountant performs all types of accounting work, including keeping records for individuals and corporations, drawing up balance sheets, estimating future revenue, making tax reports for business firms, auditing the accounts of other companies, etc.

Specialized accountants include cost accountants (who estimate costs and perform cost-accounting functions), internal auditors (who check on departments’ operations), cashiers (who collect money due to a company), government accountants (tax experts who prepare income-tax returns or help assess taxes), and bank auditors (who check the accuracy of financial records kept at a bank).

Coordination and communication

Another part of what controllers do in regard to expenses has to do with coordination and communication. This means working with company departments in order to understand how they work together and what kind of information needs to flow between them. Once the processes have been established, it is up for individual department heads (who report directly to the controller) to communicate these procedures downwards within their own teams.

This also means that controllers must be able to understand many different areas of a business, which allows them access into all parts of an organization. Although most simply deal with accounting, some upper-level controllers will end up learning about marketing and human resources as well.

Difference in education

One of these differences in education comes from the fact that CPAs must pass a rigorous four-part exam administered by the American Institute of Certified Public Accountants. This includes 3 hours and 45 min worth of “comprehensive” questions which will be asked in any order whatsoever. These questions include both multiple choice and written answer questions such as essay-type items.

Types of exam

There are two types of CPA exams:

  • The Uniform CPA Examination and the “Comprehensive” exam.
  • The master’s degree can be substituted for experience in some states/jurisdictions, but the CPA exam itself remains a difficult exam to pass.

Conclusion

The bottom line is that both controllers and accountants must deal with the same core issues such as budgets and regulatory compliance, but they approach these problems through different channels. Controllers tend to focus on external stakeholders while accountants prioritize their internal customers. While each position demands a high degree of accuracy and attention to detail, working conditions can vary significantly between the two roles. 

Frequently Asked Questions

  • Can a company need CPA as a controller?

Yes, the seat of controller can be suitable for the CPA.

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