Key Conversations Every CFO Should Be Having With Their Controller

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Fostering the relationship between the finance chief and the controller is critical to growing a business. Make sure you’re asking the right questions.

When building a business supporting technology companies, the frequent focus is on achieving product-market fit and then growth strategy. While those two things are of primary importance for any kind of company—whether large or small—another element is proper financial management. After all, the greatest of products never get to market when the business behind them fails.

Like product-market fit or growth goals, figuring out the right kind of financial strategy and how to put the pieces in place to execute on that strategy doesn’t just happen once. Financial needs in a growing business are dynamic—and critical to reaching the next level at some phases.

Of all of the financial workings of a company, one key relationship happens between a company’s chief financial officer and its controller. When properly dialed in, this connection can help a business take advantage of all kinds of opportunities. And if the relationship is not clearly articulated and executed, the company’s overall financial strategy could suffer.

What follows are some general guidelines to keep in mind when creating the optimal relationship between a CFO and controller.

Define Domains

As is the case in any relationship, sometimes miscommunication and lack of clear expectations can hamper the dynamic between a CFO and controller. Starting from the beginning with frequent check-ins about strategic and tactical objectives is important. 

At the same time, especially in smaller companies or at newer startups, the CFO and controller need to work closely enough to provide support and backup for one another when needed, which is typically often at early phase companies.

Usually, the CFO and controller responsibilities fall to one person at smaller companies, which challenges bandwidth but makes management more effortless. At larger, more well-established companies, financial operations are usually under the purview of an entire team, which frees up bandwidth but does require much more managerial acumen. The relationship between CFO and controller gets really interesting in medium-sized shops, which might consist of just two finance-related people or a small team. That’s when creating the right conditions is of the utmost importance.

One way to help ensure a good dynamic with clear communication between the CFO and the controller is to set the proper expectations during the controller hiring process.

Often the process of hiring a controller is focused on experience and the level of precision a candidate will bring to the table. While good quantitative skills are essential for a controller to handle all of the necessary operations duties, such as accounting, the right candidate for a solid CFO/controller relationship will also possess the ability to use qualitative thinking. The goal, always, should be for the CFO to help the controller see how all of the pieces fit together into the big picture because then the controller’s advice and counsel will become more valuable.

Communicating as a Two-Way Street

It is easy when handling the operations side of a fast-moving business to fall into the trap of working on urgent, short-term challenges and goals and leave the methods of building long-term processes and strategies for the future.

But part of the dynamic between a CFO and controller should be about looking ahead to create the financial infrastructure and needs to be met as a business scales up. One way to do this is to dedicate part of the CFO and controller’s time to consider how near-term decisions and processes fit into the company’s longer-term strategy.

Sounds good, but how? One method is to develop a system of metrics for evaluating business processes like performance through the lens of revenue and costs—while also keeping in mind the future health of the business through the lenses of resource allocation and return on cash. Another way of managing both short-term and long-term planning is to find ways to create value-added reporting and analysis and practices to rebalance risk and opportunity constantly.

Through the Eyes of a Controller

The best way to articulate and test a dynamic business strategy is to ask questions continually. Here are some ideas for framing questions within the context of a CFO and controller relationship:

  • What’s the best way to measure our team’s productivity, and what kind of value do we add to the overall business? The goal here is not to nail down a specific metric but rather to constantly reinforce the idea that the finance team needs to be innovative and constantly look for ways for the business to improve and optimize.
  • What are internal customers (our co-workers and the teams we support) saying about our services? What’s not working for the smaller internal community might reflect other things that are not aligning with the bigger picture business strategy.
  • Are there soft spots or weaknesses in our checks and balances and internal controls? Proactively filling small gaps can sometimes help stem more significant issues.
  • What feels too complex or burdensome—or what should we stop doing? It seems obvious, but sometimes taking the time to figure out what existing processes feel redundant or overly complex is a great way to look for new tools and opportunities to solve problems.
  • How else can we measure our importance to the business? Set aside the dollars and cents for a moment and make sure other metrics, like customer service scores and employee retention rates, are also moving in the right direction.

The Bottom Line

Paying attention to how the CFO and controller relationship is going and aligning that relationship with overall company goals can help streamline business practices and have a significant strategic impact. While there never seems to be enough time to stop and think about the big picture, building in questions related to goals, metrics and processes is a great way to align strategic and tactical objectives.

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