The role of a Financial Controller (FC)

An FC heads up and ensures the efficient and effective running of your finance function on an operational level.

The clue is in the job title: this is the person who controls the beating heart of your business. In monitoring and regulating the health of that beating heart and helping you gain more control over your finances, they enable better decision-making – which helps your business to stay on track and thrive.

An FC has the necessary skills and experience to properly design and manage your financial processes and to use technology to streamline your day-to-day activities – in a way that works best for your specific business activities. They will also know how to get the most out of your bookkeeper and the external accountant you use for your end-of-year accounts.

A quick aside: many year-end accountants will say they can offer the same service as an FC, but they can’t – because they’re trained a different way and simply don’t have the required level of expertise, nor the work experience. It’s like asking a carthorse to win the Grand National.

Let us explain. A growing business needs the support of a seasoned financial controller with 5-10 years’ corporate work under their belt – significant commercial experience gained from working across multiple industries. This gives that individual the right blend of finance expertise and commercial insight to be able to work through and reconcile often-conflicting data from different sources, and to compile insightful accounts analysis and forecasting reports on a regular basis to provide all-important financial visibility for you.

Financial forecasting is as much art as it is science. Good FCs have strong short-term forecasting skills and the ability to translate numbers into insight and meaningful management information that identifies clear actions – to help business owners and directors pull the right levers to increase profitability, improve cashflow and reduce business risk.

Not only will an FC like this have the insight and knowledge to build effective management reporting and KPIs for you, but most importantly they’ll have the expertise to delve into what these numbers really mean for your business – and help you understand that too.

Depending on your business size, they will either draw on the management reports they produce to present insights directly to you and your leadership team or support the role of a Finance Director.

However, many businesses don’t make the investment in an FC early enough in their journey – and get held back as a result.

Key responsibilities of an FC

An FC has three core responsibilities: controlling the finance function, controlling the money and controlling the management reporting in your business. This includes:

  • Managing and optimising systems
  • Streamlining and automating processes and controls
  • Managing your finance team and their priorities, your bookkeeper and year-end accountant
  • Cashflow management
  • Cash improvement
  • Cost reporting
  • Management reporting & KPIs
  • Forecasts & budgets
  • Detailed analytics

The role of a Finance Director (FD)

Rather than controlling the finances of a business, a Finance Director directs the finance function at a strategic level.

An FD is often part of the leadership team of a business and will operate on a senior, strategic level. This individual will subsequently command a far higher salary than that of an FC (often by a factor of 3 or 4).

The FD will work directly with the board of directors or business owners to provide strategic finance direction – including helping shape the direction of the business, make investment decisions or advising on potential exit routes.

To leverage the most value from a Finance Director, you’ll need to create clear boundaries between their expertise and that of an FC. The two roles are related, but call for very different skill sets.

When you get to the stage where an FD is appropriate, they will need access to the accurate and timely financial information that is delivered by an FC. The FD should not be involved in the day-to-day accounting activities of a business. Instead, they should have a clear focus on connecting the management information delivered by the FC to the business strategy.

Without the underpinning support provided by an FC, the FD can’t provide the level of strategic insight that a growing business needs – or they may try to plug the gap themselves, which can result in business owners overpaying for the expertise and time applied to distinctly operational tasks.

Key responsibilities of an FD

An FD operates at a senior level, providing strategic finance direction to help steer the future direction of your business. This includes:

  • Strategic input
  • Market analysis
  • Funding & working capital
  • Investment decisions
  • Investor communications
  • Board meetings & compliance

Determining which roles you need in your business

When you’re growing your business, you need to start from the ground up – and make sure you have a strong foundation in place on which to build your finance function. Not least because the management information, insights and strategic direction you need to inform your business decisions will only be as good as the data they are based on and drawn from.

That means getting the basics right from the start. So take time to ensure you have the right people in the right roles, providing the right expertise and establishing the right finance systems and processes for your business.

Most small businesses will have a bookkeeper and an end-of-year accountant from an early stage. As the business grows, a Financial Controller will bring the much-needed next level of expertise to build structure around the finance processes, designing systems and controls to professionalise your finance function.

With the right basics in place, an FC will then be able to develop a set of management reports that provide all-important visibility around the numbers in your business. This information, combined with easy interpretation and hands-on support from your FC, will give you the insight and understanding you need to fine-tune business performance. It will also help drive the strategic finance direction that an FD can deliver when the times comes to introduce that role in your business.

For most growing businesses, the reality is that you need a bit of each role to optimise your finance function and give you the best possible springboard for future success. Which is why accessing these roles on a part-time basis is becoming increasingly necessary – and commonplace across all sectors.

Whether you choose to go down the insourcing or outsourcing route, the good news is that most businesses up to £10m turnover only require the services of an FC for two or three days a month – making it a very cost-effective as well as effective business decision.

To find out more about the difference an FC could bring to your business, give us a call on 0333 305 0535 for a free, no-obligation chat about how we can help – or book a FREE Discovery Call at a time that suits you…


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