The Controller Position (#123)

In this podcast episode, we discuss many aspects of the controller position. Key points made are noted below.

The Controller’s Job

The job description appears fairly simple. The controller is responsible for all accounting transactions and related systems, and running the department, and issuing financial statements. That’s it. You’ll be shaking your head and saying “no, there’s so much more than that” but actually, yes – those are the core functions.

And that’s a hell of a lot. A good controller absolutely needs a four year degree in accounting, and a lot of experience. In short, when you sign up for accounting classes in college, this is the job that they’re preparing you for. It requires a lot of very specialized knowledge, and a really good controller is a very valuable person.

All right, no surprises yet – you could read that on any controller job description in the Internet. But then when you start digging in a bit more, you’ll find that there’re a lot of different types of controllers - and which type you are is driven by things like the size of the company, the type of industry, and whether there’s an emphasis on a particular skill.

How the Job Varies by Department Size

First, let’s talk about size. An awful lot of accountants are hired into a “controller” position and find that they’re the only one in the department, or maybe there’s a clerk or two. Surprise! You’re in a bookkeeper position, and that’s because you’re doing everything. So if you’re spending most of your time on data entry, this is you, even if they gave you a CFO title. Very likely the systems you run are simple, the accounting software cost a couple of hundred dollars, and you have no chance of advancement, because the company has no other positions for your skill set.

I would not be surprised if half the controller positions in the world are in this category. This does not necessarily mean that this type of controller position is one to avoid. Many people enjoy this type of work, and they’re happy. A real controller is spending most of the time managing, or reviewing information that been assembled by someone else, or reviewing systems.

If you think that’s you – you’re a controller. The key factor is that it’s a position in which you use all of that knowledge you’ve picked up in college to make sure that the accounting is done right – and if you’re doing data entry, you don’t have time to check your accounting theory. This describes maybe a quarter of all controller positions.

The Combined Controller/CFO Position

And then we have the combination controller and CFO. This is where you’re doing risk management and meeting with the bank, and fund raising, and doing investor relations – on top of all your other controller activities. In this case, the company probably can’t afford or doesn’t need both positions, so you’re combining the work load. This is a good position to be in, because you’re getting lots of practice for a real CFO job later on. And this is at most a quarter of the controller jobs.

The Public vs. Private Controller

Now, we have more variations on the position. A major one is if you’re the controller of a public company, instead of a private one. If that’s the case, you probably know a hell of a lot more about public company filing requirements than you ever wanted to know, and it’s possible that you’ve even regressed into doing nothing but financial reporting – in which case you’re in danger of sliding into a financial reporting position. Functionally, you’re not a controller any more. But if you can integrate that public reporting skill set into all of your other controller activities, it’s an amazingly valuable skill to have. Though you may not like doing this kind of work – very few people do.

The Industry Specialist Controller

But we’re not done yet. There’s also the controller who’s an industry specialist. There’s some very particular accounting associated with some industries, like construction, and oil & gas, and health care. In these cases, management usually doesn’t even consider hiring in a controller who has no experience in the industry – it’s just too risky that the new hire might not know something important, and screw up the accounting.

This means that some controllers have figured out early on that a specific industry skill set is very valuable, because it gives them a huge edge in getting hired within the industry. So if you’re an auditor and want to become a controller, start specializing in a specific industry. And the same goes for anyone trying to work their way up from within a company – pick a business in an industry with the most convoluted accounting rules imaginable.

The Functional Specialist Controller

And then we have the functionally specialized controller. You may very well be one of these. For example, some companies do a lot of acquisitions. If so, the controller with the acquiring company may spend about 80% of the time on integrating the acquisitions.

And then we have the companies that compete based on cost – and that tends to produce controllers with an incredibly strong process orientation – because they’re trying to squeeze every last penny out of the accounting operations. In both this and the acquisition situation, I could make a strong case that the controller is more of a process engineer. Accounting rules play a very small part in their lives. All they think about is processes and controls.

In companies where you have several of these specializations, like acquisitions, and public company reporting, and process reviews – it’s possible that the CFO decides not to have any controller at all. Instead, there may be a whole bunch of assistant controllers, and each one is a specialist in one of those areas.

Parting Thoughts

So how do we summarize all of this? First, about half of all controller positions are really bookkeeper positions. The remaining positions are on a continuum of light controller up to one that’s really a hybrid with a CFO position. And on top of that, there’s a lot of specialization by industry, such as health care, as well as specialization by function – such as acquisitions.

So what all of this means is that it’s pretty hard to find a controller position that really fits the standard job description. Instead, there’re all kinds of niche areas in which you can specialize. As long as you’re aware of these differences, you can alter your skill set to make yourself perfect for a particular type of controller position that very few other people are qualified for.

Related Courses

New Controller Guidebook