Today’s mid-market Financial Controller can learn from the past to succeed in the future

By - March 4, 2016

The role of the Financial Controller in middle market companies has evolved leaps and bounds in the past decade. Years ago, the role of finance seemed to focus on meeting the heavy demands of our respective organizations as reporting resources. Today, this has evolved beyond reporting the financials to driving business results. We are able to become business partners and provide real-time information and strategies by adopting new technologies and realigning our staff and resources to meet these new expectations.

Today’s Controller has been shaped by a number of different drivers throughout the years. First, we were introduced to the overwhelming requirements of Sarbanes-Oxley, courtesy of major corporate and accounting failures at Enron, Tyco and Worldcom, to name a few.  And then for companies with multi-national reach, we had to keep up on an expanding IFRS rule set on top of our existing US GAAP responsibilities.  Second, companies of all sizes started to grow internationally much sooner in the life cycle requiring Controllers to be able to manage processes and reporting in numerous parts of the world with limited resources.  Third, as the world has become more flat generating a greater level of competition for nearly all industries, there has been more pressure to cut G&A costs by reducing our resources, adopting shared service centers and new technologies.  You’re now expected to manage teams in your own office and bigger teams 15,000 miles away and 12-hour time differences.  And finally, with the role of CFOs evolving to take on more strategic responsibilities, including the IR role, Controllers are required to fill the gap on top of what they were already expected to accomplish.

Let’s take a look at some of the common challenges Controllers face. As we previously discussed, the advent of SOX and the growth of accounting pronouncements makes it very challenging to maintain an effective control environment.  As a Controller, I have to make every attempt to hire operational managers that have the requisite background and skillset to research their own topics as the SEC Reporting function has its own growing level of obligations….XBRL being one of them.  Another challenge has to do with pulling together the necessary information from a variety of systems to produce timely and accurate financial and management reports and associated disclosures.  Many systems don’t talk to each other in the same language and require complicated integrations which have a tendency to break when one system is further customized.  A significant percentage of companies are using ERP and other key systems that are outdated and are not capable of keeping up with today’s reporting and operational requirements.

One of the solutions that I recommend to Controllers is NetSuite. The first advantage of working in the cloud/suite environment is in the area of our standard financial close.  We perform the same hard close every month.  We’re able to finalize our monthly consolidated results in about 5 days as we’re able to avoid time required to reconcile the interactions of numerous systems given that we perform all of our core processes in one system.  And since everybody is looking at the same data on a real-time basis, we can spread our close/FP&A resources between our headquarters and our shared service center w/out having to wait for one group to roll up their separate financials.  With the ability to quickly finalize our actuals, our FP&A team can update their forecasts with their business partners in a timely fashion which forms the basis for new strategic decisions.

NetSuite ERP Financial Controller

A couple of key processes, order to revenue and procure to pay, also leverage the cloud/suite platform.  Sales and Finance operate in numerous geographies/time zones of the world with the ability to convert a lead to an estimate to a SO and then invoice that SO, book the revenue and apply the cash to the invoice with all of those records and transactions linked leaving an easy to follow audit trail.  The procure to pay process works very much the same in the sense that even with a de-centralized purchasing system, our AP group can follow the purchase request to PO to bill and bill payment through the same system as they are all linked and processed in one system leaving little to reconcile.  We can spend more of our time analyzing results rather than trying to reconcile various systems.

Our auditors also leverage the cloud concept by being able to view transactions and supporting documentation from anywhere with a custom role that we develop for them.  The system notes that document movements through the suite also provide them with a solid audit trail as they perform internal control and SOX testing to form the basis of their review and audit conclusions.  And by processing nearly all of our transactions in one system, the auditors can reduce their testing of integrations and key IT controls of numerous systems.

So to summarize, here’s why a cloud/suite environment supports the Controller Function: (1) Being able to manage the business through a single system and database from anywhere that you have an internet connection; (2) Where all employees log into the same system and see the same data, only limited by the roles and permissions that you establish; (3) Consolidated data can be viewed and analyzed on a real-time basis with the ability to customize various geographical views; (4) Control can be localized and customized while at the same time allowing for a global roll-up within the same system; and (5) It facilitates a global finance organization regardless of how centralized or de-centralized you wish it to be given the access point of the internet.

As many will be reading this post, there will inevitably be varying levels of engagement that you’ll want to take next and your sentiment might fall into one of these categories:

  • Interesting article, thanks for the information. To which I would respond, thank you for reading and please subscribe to our blog to get more content like this. Enter your email address on the right under the heading, “Receive New Posts by Email”
  • I may or may not have heard of NetSuite and I’d like to do a little more research on my own. To which I would respond, that’s great. Here’s a link to a self-service product demonstration where you can see how key business processes are addressed in NetSuite, http://rsmus.com/what-we-do/services/technology/erp-and-crm/netsuite/netsuite-product-demonstration.html
  • I’m evaluating ERP systems, and I may or may not have created a short list of solutions yet. To which I would respond, RSM represents many different ERP solutions in addition to NetSuite and you might find that another system fits better for your organization. You can start by completing this ERP System Evaluation, http://rsmus.com/what-we-do/services/technology/erp-and-crm/netsuite/erp-system-evaluation.html
  • NetSuite sounds like a potential solution for my company’s ERP needs. To which I would respond, you can reach us by email at erp@rsmus.com or by phone at (855) 437-7202   .

By: Brent Knowles – National NetSuite Solution Provider

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