The difference between a Business Controller and a Financial Controller (and their typical job description)

Hi,

Recently I have seen some discussion about the definition of two roles: that of a Business Controller (BC) and Financial Controller (FC). In most Western European companies, both roles coexist and there is little misunderstanding what they do. What I do note is that the role of a controller in the US is given a different interpretation and is completely geared towards protection of assets and managing risks. The difference between Financial Controller and Business Controller is hardly relevant in the way they work. Then in emerging economies, there is still a need to define these roles. I am not the type of person that will immediately say they are behind and need to catch up. It is also a very different market environment with an own set of challenge. This attempt is aimed at getting a clear picture of the difference between both. For a more detailed description, I would like to invite you to some specific posts about it.  

The variance in exposure to the market lead to a wild and exotic variety in companies. The controller’s role however can be defined quite precisely across that lot. It should be clear I am talking about an average sales company in a normal, open, market economy. And although there is no formal dichotomy between Business Controller and Financial Controller, I’ll have a try here and now. What I do ask you is to let go of any ‘old’ perception of what finance is and does – we are not talking about accounting, and the times that a head accountant naturally evolves into a controller should be left far, far behind. Also, it is clear that a real, ‘hard core’ Business Controller and Financial Controller are quite different personalities.

Business Controller

As the name says, a Business Controller is business and commercial minded. He partners up with other functions outside of finance, almost like a consultant does. He is active, aggressive, externally focused and future oriented. With his strong network in eg. logistics, production and sales, he will build business plans and define ways to identify gaps, opportunities. In order to really know what drives the business, he defines ways to measure and report on the key indicators of it. He will bother with the P&L much more than with the Balance Sheet. He will also need to link into the business model, to tailor his approach depending on the business he works in. Often you will read in a business controller’s job description he also needs to think of ways to identify cost saving opportunities and efficiency gains. It is a social job and he is a real part of the line management and decision taking, including all risks involved.

Financial Controller

A Financial Controller will have responsibilities on the accurate and timely reporting of historical information. His job description requires competencies that consist of understanding and assuring the compliance with GAAP, IFRS, SOX and tax norms. The senior Financial Controller will manage the external audit and do the statutory reporting, also to stockholders. An Financial Controller will run reports and controls on Accounts Payable, Accounts receivable, etc. He bothers with the Balance Sheet much more than with P&L. He is responsible on controlling the financing of the business (the liability side, i.c. the loans) and of consolidating the reports from all parts of the company. Finally, he works much closer with the financial systems in the company.

If a BC is more aggressive, a Financial Controller will be more reactive as he has little exposure to external factors. Needless to say, there will be a natural tension between the more central, ‘corporate’ role of a FC and the ‘market unit’ BC. Some other metaphor will place an Financial Controller as the little “CFO” against the BC as a little “CEO”.

Also, see this table:

As a final remark, I hope you noticed I did not mention business analysis as an aspect of these jobs. That is because there really is a difference between what an analyst does and what a controller does (often managing a team of analysts). In real life, both the BC and the FC will increasingly need to have a strong analysis background.

Please also have a look at my new series on the ideal controllers’ task list.

I hope you like the post and I really look forward to your reactions!

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About curiousmanager

In life there are generalists and specialists. Although your job pushes you down towards a certain specialization, I feel it's important to keep your eyes and mind open for new stimuli. And I want to share my journey through arts, literature and sciences with other knowledge workers and managers. You don't have time to read. Let me do that for you and present only the best of the best in my blog!
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36 Responses to The difference between a Business Controller and a Financial Controller (and their typical job description)

  1. Pingback: The 5 skills for kick-ass business analysis | The Curious Manager

  2. Hans says:

    This is the best explanation I could find on the internet about the difference between a Business Controller and a Financial Controller.

    • Leonardo Zia says:

      Dear Hans,
      I found it very clear and good. I wonder however, if it is possible to see a pattern in the profile of a FC vs a BC. I am a BC and I have a MBTI profile of “ENTP”. I thought it could be interesting to see how the spread is! Of course remembering that just because you have a BC titel, does not mean that you meet the criteria you have written.

  3. Thanks Hans, much appreciated.

  4. Thomas says:

    I works for logistics for all my work life. Once someone invited me to be a BC, I said to him that I dont have expert skill in Fin& Acc. He just told me that it’s not like that, and will let me decide during long holidays. I try to search what exactly be a “Business Controller”, and this explanation is very clear. Now, I know what should I decide, really appreciated yours.

  5. Matija says:

    thank you, you helped me define future plan

  6. Tamer says:

    Excellent, i really appreciate your effort, crystal clear. Thank you

  7. small says:

    extremely useful description. I just started work where they hired me for the set of skills described above under business controller, even though the designation is otherwise. I even report to the head of my BU, even though the CFO organization hired me. Amidst these paradoxes, I was looking for clarity and your article lays it out in a very nice manner. Thanks

  8. Rk says:

    I work as a business controller in a European multi national and this is the best explanation I have seen. Good work!

  9. David says:

    I appreciated how you made it clear that solid reporting from the Financial Controller makes the Business Controller more effective. Informative write up!

  10. Simi says:

    Excellent post!

  11. Winner says:

    Thanks so much for the excellent explanation!
    Can I think some functions of BC will be under Finance Department? For example, Company Budget?

  12. Jack says:

    Excellent explanation for the differences between BC and FC. I like it very much.

  13. Stefano says:

    A simple post that goes to the point. I have a question for curiousmanager: many Western companies have functions such as “Strategic Development” or, more simply, “Strategy”. Given their role within the organization and based on what you said here, I tend to think that these functions are relatively close to those of a BC. What do you think?

  14. chiara says:

    Now I have clear in mind the definitions.
    ANd I understood what I would like to be.
    thanks so much, have a good day

  15. Sarah says:

    Hi there, I’ve just secured a contract role for two months and the employer is happy for me to come up with a title and I’m wondering if I can get away with “Business Controller”, or else what other title that may be relevant. The job is to go in and tidy up all of the accounts; mainly accounts receivable; it will be going back 3 years – my problem is that my previous titles have been Business Partner, Financial Controller, Financial Accountant etc, and I don’t want it to look like the title has dropped significantly with this new contract role. The company that has hired me for the contract role wanted to hire someone with more than enough experience, so they can just leave them to get on with it. Any advice will be greatly appreciated.

    • Hi Sarah,

      Following the definition above it seems you would be a financial controller still. Your focus is on the balance sheet although you are dealing with the parts that are closest to the operational part of the business.

  16. As Hans pointed-out, and as you have yourself mentioned in this post, there is much ambiguity about the understanding of the role of Controlling in general, outside of the professional group. I came to learn of Controlling quite late in (i.e. at the end of my) academic life, having been born and raised in a developing economy (India). It was only when I was finishing my post graduate education with an internship in a Western European multinational, did I come across this interesting function! I have had to come back to homeland for some reasons since, but found it very difficult to find a matching JD (or entry-level position in) Controlling out here. Also, speaking to a German Controller recently, I was (re-)advised that (as you mentioned in your post), it has very little to do with accounting. I figure that it has more to do with knowledge of Costing/Management Accounting (on the numerical side of business) and of course P&L (and maybe slight process understanding or assurance/consulting aptitude, as you point out) than either pure play Finance or Accounting. This should be especially true of Business Controller in an European context!

  17. MT says:

    Good explanation! What about a Corporate Controller, how is that different from BC or FC?

  18. nyenstad says:

    Excellent – especially the point about the BC reading into the P&L more than the balance sheet. I am a BC in a mid-size production company (100 employees) and as the only controller of the company I have to do both business controlling and financial controlling.

  19. Hallo!

    This seems to be an excellent definition! I have worked as both FC and BC and found that your definition holds true to both of those jobs. I would like to mention as well that for a young aspiring finance professional who wants to become a CFO one day you need to have served as both. I am not necessarily agreeing with FC being more CFO minded and BC being CEO minded.

    In today’s finance department the CFO needs to act more like a BC than an FC otherwise the CFO will not get a seat at the table when talking strategy and business development.

  20. Pingback: Task list of a controller – part 1 | The Curious Manager

  21. Gerard says:

    Hi,

    Quite like your post on the difference between BC and FC and as a BC I can relate to the PL focus. However, I do think that the management of working capital on the BS is the territory of the BC as well. Especially in working capital intensive, high volume and low margin businesses this is an area one would not (in my view) leave in the hands of the FC.

    Kind regards,
    Gerard

    • Hello Gerard,
      I completely agree on your remark re working capital.. let’s say a BC spends time on P&L AND cashflow management. That obviously entails the abm net working capital.
      Best regards

  22. Pingback: The most common pitfalls when implementing a new ERP | The Curious Manager

  23. Bob says:

    Very good explanation

  24. many thanks for the article,I will be promoted to Business Controller next year. Your article will help for the challenge

  25. Dennis Raffaelli says:

    Interesting distinctions. Both in function and in personality traits, I am a financial controller. I do tend to focus on the balance sheet. I always felt if the balance sheet is in line, everything else will fall into place. I do treasury, insurance, and HR functions as well. Our general manger, although not a financial person, is more the business controller dealing with planning etc.
    Thanks for the clarification. I do not remember the differences brought out in college business courses. (Of course, that was a long time ago.)

  26. Fidel Ordaz says:

    Excellent reading, I have been working like BC for more than 8 years and it really describes the function, I shared it with my team!!! Thanks a lot

  27. iRINA says:

    THANK YOU SO MUCH FOR YOUR HELP, YOU ARE REALLY SMART!
    BEST REGARDS,
    IRINA,
    ENGLISH TRANSLATOR

  28. jclarke says:

    Thank you very much for the explanation provided, which was very helpful. However, you touched on the difference b/w a Financial Controller/Comptroller in the US vs. Europe. Someone also made a comment about a German Company, which is the country my son will be working this summer. He has a internship with a small book publishing company and I am wondering what his primary focus should be if he is interested in Financial Controlling in Germany?
    thank you
    jclarke

    • Dear JClarke,
      thanks a lot for your reaction.
      My gut instinct tells me that ‘German small book publishers’ are a conservative bunch. A young intern can quite easily make a difference there.
      It also depends how large that company is. Do you have any revenue numbers? My guess would be to have a good first look at financial ratios over the last 5 years – the local accountant typically doesn’t provide that. Next I’d go through product portfolio analysis: which books sell, and when. What metrics can be put in place to understand the business. Why would certain items sell better. Is there an ‘adoption curve’ when a new book arrives. Are there industry benchmarks you can find on the German publishing market (there will be). Understanding business like that will in turn help to forecast orders and thereby optimize working capital. Finally, your son can conclude by developing a cash planning tool; business development or marketing department can indicate what they’ll do in the next weeks and given certain DSO, DPO, profitability etc he can ‘automize’ the decision making and estimate financing needs.
      That should do it for this summer :)

  29. TM says:

    Thank you very much ! crystal clear ! I am French, 35 years and I have worked for several years as BC within a commercial branch of a Big Pharma and I am willing to move forward to a more commercial position more in line with my temperament of business developer and my communicative attitude. Unfortunately in most French companies job title commonly used is simply “Contrôleur de Gestion” which most of time covers both BC and FC… Consequently it is very difficult to convince Human Ressources Dep and even HR Consultants here in France that it is possible to have a controller background AND to be business oriented, creative, communicative , able to identify hidden risk and understand client’s need and market on top of financial and analytical skills… In absence of a significant pure front office background my plan is sometime seen as a “reconversion whim” in the context of crisis whereas your table just shows the opposite… I will now include management letters of several Commercial Directors with my application ( and maybe should include your URL in my next cover letters ! ) but I am seriously thinking to move abroad to continue my professionnal life, anywhere in the World since I am 100% mobile …

  30. Thank you very much! Very helpful. I am having an interview for a Business Controller position, and although I am aware of some of the differences, your post made everything even more clear!

  31. Sauro says:

    This description is perfect: I’ve been working for several years as a Business Controller, now I’m working as Financial Controller.
    As BC you need business and analysis background; as FC you need finance background.
    My working country is Italy and I’ve always worked for French companiens but I know in US things are a little different!

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