Market Leader Accounting And Finance Pdf Book' title='Market Leader Accounting And Finance Pdf Book' />Finance Director vs Financial Controller Understanding the Differences.Finance Director vs Financial Controller.Most companies have an individual in a senior Finance role.Often the title given is one of Director, other times it is Controller, many times its confusing to understand the difference.At its simplest the Finance Director directs and the Controller controls.Many growing organisations do not have a clear understanding of the two positions, often overlooking the value that a Finance Director can bring to their business.All organisations can see significant value added by a Finance Director often its just a question of determining what level of Finance direction is needed, and for the typical SME a part time FD is often an ideal solution.Whether full time or part time it can be very valuable to have a team member with 3.We can do a Strategic Business Review of your business from as little as 2.Market Leader Accounting And Finance Pdf Book' title='Market Leader Accounting And Finance Pdf Book' />To determine the level of financial leadership a company requires, and the right mix of Financial Controller Part Time FD, its important to look at the differences between the two roles.Understanding the Duties of the Finance Director and Controller.The Financial Controller is often thought of as the head of the accounting department, although this role shouldnt be confused with that of a bookkeeper.The primary function of the Controller is to maintain and operate the books and records of the business, looking back at data already generated.Under the guidance of the Finance Director a Controller also maintains standard operating procedures for all accounting and bookkeeping functions.Market Leader Accounting And Finance Pdf Book' title='Market Leader Accounting And Finance Pdf Book' />The FD is the financial leader of the business.Adobe Com Support Flash Player Downloads Html Color '>Adobe Com Support Flash Player Downloads Html Color . 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While the primary function is to look ahead, the Finance Director must also be able to understand past financial performance in order to accurately predict the organizations financial future.The chart below summarises the key differences between the two roles obviously the level of importance and experience time required varies between the size and complexity of Companies Finance Director vs Financial Controller Finance Director.Controller Strategic Planning.Corporate Strategic Planninga Participation in strategy discussions.Xb Selection of initatives.Xc Creation of financial plan pl, bs, cashXXTax strategy.XRisk management strategy.XXTreasury Strategy.XInternal Control Strategy.The Accounting Management unit at Harvard Business School strives to be the worldwide leader in research, course development, and teaching on top managements use.Hear from senior market risk professionals at the Fundamental Review of the Trading Book conference from leading financial institutions as they assess the challenges.XXMarket Product Competitive Analysis.XFunctional oversight management Accounts PayableReceivableBillings.XFinancial Analysis.XTax.XTreasury. XNon finance staff areas HR, IT, etc.XAccounting.Manage Accounts Receivable billingcollection.XManage Accounts Payable paymentdiscounts.XCost Accounting job cost, per unit, etc.XReconcile Bank accountsloans.XIssue basic financial statements.XDesign and maintain Chart of Accounts.XMonth end close process.XCompliance with GAAPXXManagement Reporting Design Management reports.XPrepare Management reports.XDevelop Action Plans from Mgt Reports.XXDesign Financial Statements historical projections.XPrepare Financial Statements historical projections.XFinancial Analysis Develop Performance Measurements.XMaintain Performance Measurements.XXOperational Reporting package.XXDevelop Action Plans.XXBudgetingForecasting.Develop Budget targets and other financial plans.XFacilitate budget process accountability, schedule.XXPrepare budgets forecasts.XProject cash flows.XXReview Capital requestsapproval process.XProcess Capital requests.XInternal Controls Audit.Design and review Policies and Procedures.XXMaintain Policies and Procedures.XReview Internal Control system.XXMaintain Internal Control system.XManage Auditor relationship.XXPrepare Audit informationschedules.XDevelop Action Plans relative to internal control needs.XXBoard of Directors Investors.Board reporting preparationdelivery.XMaintain investor relations.XContracts Outsourced functions.Negotiate contracts.XNegotiate Outsourced functions.XMaintain Outsourced functions.XMaintain insurance coverage.XM A Divesture activities.Develop M A targets.XNegotiate acquisitions.XDue Diligence.XXImplementation.XXDivestituresShutdown.XXInvestment Funding Activities Develop banking relationships.XMaintain banking relationships.XArrange debt financing.XConduct equity placements.XInvest funds.XMonitor cash balances.XThere is a significant difference between the strategic and tactical value that FDs brings to the executive leadership teams of their respective organisations, and that of Controllers.For example, the Controllers role is to provide financial statements and gross profit statements showing a 5 decline in the companys quarterly revenue.The FDs role is to evaluate and explain the causes behind the decline they look beyond the numbers to see root cause, as well as the corrective actions needed.The Value of a True Finance Director.The FD holds a variety of responsibilities, including cash management, budgeting, compliance, internal controls, corporate credit and collection, audit, financial planning and strategic planning.The Finance Director acts as a trusted advisor to the executive leadership team, working as a sounding board when key decisions are being discussed.The most significant value provided by a FD often centres around the area of financial oversight and management.Analysis of the reports provided by the Controller enable the Finance Director to generate working capital and forecast information.Analysing and reviewing monthly P L statements, balance sheets and cash flows provides the information needed to drive toward data based decisions.Ultimately, the FD works to correlate operational and financial data provided by the finance department so that the executive team understands the financial impact of decisions in real time.Growing businesses cannot often afford, or may simply not require, the services of a full time FD.Yet, they may be seeking the forward thinking skill sets that such professionals bring to the table.A part time FD can often provide the needed financial expertise and direction at a fraction of the cost, creating affordable options for small and growing businesses.A part time FD who functions on an as needed basis can become a trusted advisor to the MD, offering key business, financial and operational insights needed to control and shape the direction of the organisation.We can do a Strategic Business Review of your business from as little as 2.Company Size.Although there are no hard and fast rules and turnover for service based companies will have a lower threshold than these typical non service company thresholds, as a general guide Pre Revenue.Assuming the firm is in fund raising mode with limited staff, it may want to consider a part time Finance Director with fund raising capabilities and outsource the basic accounting ie.Controller functions until they can build a management team.Typically the fund raising will be more efficent and successful if an experienced Part time FD has been used to prepare the Business model and Competitive analysis.Under 1.M in Sales.Full time Book keeper Controller Part Time FD for significant events acquisition, major contracts, etc.Consider a fund raising Part Time FD if capital is needed.M 4.MTypically the same as under 1.M, but will have controller and maybe finance staff unless the firm is in rapid expansion, secured substantial investment or in rapidly changing environment new pricing models, etc.If firm is going public, generally a full time FD is added to oversee process.Over 4.M Assuming firm is looking to grow, then a full time FD is likely to be appropriate even then much will depend on the underlying comlexity of the operations overseas trading, multiple customers, manufacturing operations.The skill level need will vary with the companys needs e.Not withstanding a full time FD, in many cases it is very worthwhile to also use an experienced part time FD for significant projects, or independent view point to the Board.This article may be downloaded in pdf format by clicking here.We can do a Strategic Business Review of your business from as little as 2.This was written by Neil Dockar, a Commercial FD with over 3.Following 1.
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