Corporate Finance Career Path #2: Controllership

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What is Controllership?

Controllership, or financial accounting, often gets a bad rap in the finance world. Many perceive it as a monotonous job involving endless inspection of journal entries. However, there's much more to this role than meets the eye.

The exciting aspect of controllership involves maintaining the integrity of the Balance Sheet. When accounting issues arise, it’s your responsibility to ensure that the financial statements accurately reflect the company's state. As an Analyst, you bridge the gap between the world of accountants and other financial departments.

The Accountant vs. The CFO

Understanding the distinction between the roles of an accountant and a CFO is crucial:

  • Accountant: Ensures accuracy to avoid the need for restating financial statements.
  • CFO: Aims to meet Net Income targets, sometimes by adopting more aggressive accounting practices.

A CFO may push for policies that enhance Net Income figures, even if they stretch accounting norms. For instance, a CFO might:

  • Classify more expenses as Capital Expenditures to keep them off the Net Income statement (e.g., capitalizing R&D spending).
  • Adjust the timing of expenses or modify revenue recognition policies to improve Net Income.

As an accountant, you must balance these pressures, ensuring that financial statements remain accurate and transparent while satisfying the CFO's objectives. Your role involves making sure that auditors can review and understand the financial statements without requiring restatements.

The Role of Audits

Audits are a significant part of corporate finance jobs in controllership. You provide auditors with the necessary accounting documents and ensure that everything is in order.

Organizational Structure

Traditional accountants are typically divided by product or region, coordinating their work to ensure proper bookkeeping. On the more finance-oriented side, there are 3-4 Analysts led by a Senior Analyst, focusing on producing accurate financial statements and managing all related responsibilities.

The Controller, who heads this department, reports directly to the CFO.

Controller Salary and Lifestyle

If you're on the traditional accounting side, you can expect excellent work-life balance. You’ll work around 40 hours a week, earning approximately $40-50K USD for an entry-level position.

However, if you're interested in the more dynamic side of controllership, aiming for a path to CFO, your hours, salary, and promotion prospects will resemble those in FP&A roles. Be prepared for intense periods, such as annual closings, which can involve long hours similar to those in investment banking.

By understanding the complexities and responsibilities within controllership, you can navigate your corporate finance career path more effectively. Whether you prefer the stability of traditional accounting or the dynamic challenges that come with aiming for a CFO position, controllership offers diverse opportunities for growth and professional fulfillment.

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