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Resolving the Top 3 Sources of Conflict for Controllers

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Advances in technology are rapidly reducing the resources controllers must devote to routine tasks, leaving more opportunity for strategic planning. The timing couldn’t be better, as competition from global and internet-based companies continues to grow. Controllers are uniquely positioned to add value by spotting areas of opportunity for reducing expenses and using strengths to greater advantage.

Adding value effectively requires strong partnerships with leaders. However, creating and maintaining these relationships can bring conflict, which typically stems from these three basic issues:

1. Incomplete Reporting

Managers are focused on completing the work of the business as accurately and efficiently as possible. Whether they lead the customer service team or supervise the production line, their daily goals revolve around creating an excellent product or service and delivering it on-time. While these goals are critical to business success, the intense focus on meeting production requirements often results in decreased attention to internal reporting.

Those that are less familiar with accounting activities don’t realize that the figures they provide form the basis for understanding business strengths and weaknesses, identifying trends and creating effective strategies for future growth. Instead, reporting is a source of frustration, taking valuable time away from more pressing tasks.

Managers with limited time can be tempted to delay or cut corners when completing financial paperwork, a practice that rapidly snowballs into disaster as a series of related reports use these original figures for their calculations. A carefully considered communication strategy is often the solution for this conflict.

Consider the perspective that managers bring to the table. If they don’t have a clear understanding of how controller services contribute to the business, they may write off the entire finance department as a collection of number crunchers with limited connection to the reality of day-to-day life on the production floor.

Face-to-face interactions can combat this impression. Instead of staying put behind closed office doors, get out onto the floor and ask for a tour. Ask managers to teach you the basics of their areas of responsibility and show interest in the challenges they face every day. This opens the door to a conversation about how their jobs connect with the big picture on the financial side.

2. Inaccurate Spending Figures

When relationships between controllers and management are weak, business leaders are less likely to contribute accurate documentation of expenses. A variety of motivators may prompt over- or under-reporting of spending. Remember that the basic functions of a controller’s position can be seen as a threat to managers when communication is poor:

  • Controllers are responsible for supporting the budgeting process. Managers consider this a referendum on their financial decisions, as controllers may challenge requests for project funding, headcount and so forth.
  • Controllers create accounting-related policies and procedures. Managers consider this additional, unnecessary paperwork that – if left unfinished – can threaten their job security.
  • Controllers design internal controls. Managers consider this unnecessary oversight and they worry that an error could lead to disciplinary action.
  • Controllers create performance metrics. Managers feel they are held to unreasonable standards, and they worry about threats to their job security.

The controller’s job is exponentially more difficult when faced with uncooperative managers. Instead of focusing on making strategic recommendations, they must spend their time verifying information and tracking down missing or inaccurate figures. Creating a plan to address these potential issues before they become a problem can prevent a lot of wasted resources.

Transparency is key to overcoming mistaken impressions of the controller services’ role in the business. This can be achieved by marketing the finance department internally, similar to the techniques used for any major organizational change. Use all available channels, including internal newsletters, informational lunch meetings and quick-hit emails to describe the responsibilities and challenges facing the finance department.

Prepare management for upcoming asks well in advance. For example, before requesting budget submissions, talk with managers about the current economic environment and where the company stands financially. When managers understand the underlying logic of decisions that might otherwise appear arbitrary, they are more likely to give controllers the benefit of the doubt, creating a healthier relationship. Better relationships mean greater partnership, leading to accurate reporting.

3. Disagreements Over Financial Predictions

As controllers review financial data, they have an opportunity to identify which areas of the business are successful and which need to become more profitable going forward. Making tactical and strategic recommendations to management for the purpose of cutting costs and/or expanding the business is one of the most important services they provide.

However, managers question whether individuals on the accounting side of the business understand the real-world problems managers face. They may disagree with the recommendations, feeling pushed into a course of action they don’t support. Leaders with too much experience may assume that they can better predict the results of a specific course of action while leaders with too little experience can fail to see the big picture. Either way, lack of buy-in can disrupt planned changes.

When possible, including management in the planning process is the most effective way of gaining buy-in. However, if disagreements over how to move the business forward crop up, a strong-arm approach can often do more harm than good. Instead, come from a point of curiosity, asking questions to gain an understanding of managerial concerns. In many cases, members of management offer useful insight that can dramatically improve a project plan.

If the two sides cannot reach an agreement, maintain a respectful tone that shows differing opinions were seriously considered and are valued. In many cases, this sets the stage for stronger partnerships going forward and creates an opportunity for gaining consensus in the future.

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