The new controller - with five redefined chores.

• Author: Willson, James D.
• Position: Includes related articles

You ask what it takes to make a great controller today? Here's a job description you can add to your manual.

James D. Willson

Former Senior Vice President-Finance

Northrup Corporation

James P. Colford

Former Director of Accounting Practices

IBM Corporation

1. PLANNING

   Establish and maintain an integrated plan of operation consistent with the company's goals and objectives, both short and long term, analyzed and revised as required, communicated to all levels of management, with appropriate systems and procedures installed.

   What do you expect from the financial executives working for you? Odds are that your picture of the perfect financial sidekick changed over the last few years as the economy surges and recedes. Many companies fumble with job descriptions for their top people, because either the executives take on extra responsibilities or they siphon duties to specialists.

   At Financial Executive, we're getting more than the usual number of requests for formal definitions of the roles of different financial executives. That tells us that many firms want guidance. They want something in writing that they can use to size up prospective employees or to evaluate existing ones.

   One of the more frequent requests is for a clear description of the job of the controller, maybe because the controller can wear so many bats, depending on the size of the company and the attitude of the person in the controller seat. Here, two businessmen who worked closely with controllers define that job.

   Who is today's controller?

   Although the scope of the position varies from company to company, one concept is common. In the representative company, the controller is thought of simply as the chief accountant who supervises and maintains the formal corporate financial records. He or she is regarded as the executive concerned with general accounting, cost accounting, auditing, taxes, and perhaps insurance and statistics. But that viewpoint is backward looking.

   It's true that the controller must engage in accounting activities; yet he or she shouldn't restrict the role to the recording function. The controller is expected to extend the accounting function to its management applications, to have an attitude that energizes and vitalizes the financial data by applying it to future company activities. It's a forward-looking concept-a trained analytical approach that brings balance to the management planning and control system. The controller's viewpoint should be the management viewpoint-one that guides management's thinking to the most profitable combination of operations.

   What does the controller do? Many comprehensive definitions of the controllership function have been developed over the years. The basic functional responsibilities and activities may be divided into five categories: planning, control, reporting, accounting, and other primary responsibilities. Establishing and maintaining an integrated plan of operation has been described as a major function of the controller. The business objective is profit, and planning is necessary to fulfill it, for profits do not "just happen." Visualize, then, the role of the modern controller in business planning.

   First, he or she has a responsibility to see that a plan exists and that it is supported by all levels of management. The implication of an integrated plan is that all parts will mesh and support the business objective. For this reason, all members of management must participate willingly. It must be the company plan and not the controller's plan. The controller will act as coordinator in the various stages, in translating the base to monetary terms and in putting the plan together in financial terms-finally expressed as a statement of forecast income and expense and a statement of estimated financial condition, together with supporting schedules.

   Assuming the recognition of the need for a plan, and the desire by all in management to participate, then the controller has a responsibility to determine that the parts in and of themselves are sound and that they fit together. For example, the controller should, as a staff executive, ascertain that the sales plan or forecast...