Financial controllers are the CFO’s right hand—and 86% say their role will change dramatically #CashNews.co

A new global report by EY released this morning, finds 86% of financial controllers expect their roles to change dramatically in the next five years. Controllers oversee a company’s day-to-day accounting operations, implement financial plans, and supervise accountants. They ensure the finance organization meets compliance standards with clean financial records. But that’s now becoming just table stakes.

More than a third (39%) expect the focus to shift to value creation—actively supporting business growth. That’s a departure from the traditional strongholds of value protection and optimization, according to EY. The firm’s survey is based on the views of more than 1,000 financial controllers across 28 countries and territories.

“Controllers are enabling CFOs to take on the additional scope they need to be successful,” Myles Corson, EY Global and Americas strategy and markets leader for financial accounting advisory services, told me.

Traditionally, a controller’s agenda was primarily about getting numbers right, driving efficiency, and being cost-effective, Corson said. But they’re expected more than ever to be a part of the value-creation journey for the company, which requires also being forward-looking. “How do you measure and deliver the return, rather than just measuring the investment in the input?” he explained.

Controllers can translate all of the historical information into influencing and shaping what the future looks like, Corson said. They have also been leaning into AI with 67% of respondents already using the technology for daily tasks. And 88% said they’re using data to provide strategic insights.

I asked Edwine Alphonse, senior controller at Ramp, a fintech, for her perspective. “Controllers are in the privileged situation to see all the financial transactions happening inside the companies,” Alphonse told me. The responsibilities are much more than just “keeping the lights on,” she said. It’s also about finding the best suppliers, vendors, and technology systems to help the company scale and ultimately creating a team that’s efficient in providing insights, Alphonse said.

Not every controller aspires to become a CFO

There’s a cohort EY describes as “confident controllers,” 25% of the overall survey sample, who are in many cases, more tenured and experienced. These controllers like their position and want to stay in the role. Only a third of confident controllers said they want to become chief financial officer.

Confident controllers are different from those controllers who see the job as a stepping stone to the CFO seat, Corson said. Controllers seeking a CFO path are mainly interested in delivering a really high-quality performance in the current role, rather than getting into the weeds of innovating it, he explained.

Seventy-three percent of controllers who want to stay in their positions say innovation matters, compared to just 51% of those who aspire to be CFOs. Confident controllers can show how the role can be a force for true value creation, according to Corson.

Many companies no longer require finance chiefs to have accounting backgrounds. That’s connected to the rise in “strategic CFOs” with finance backgrounds who excel in key areas of strategy, communication, and leadership.

To that end, I asked Corson if innovative controllers who understand value creation will be in demand. “Absolutely; I think that makes it even more important that the controller has traditional skills, but is also able to step up and interact with that new CFO mandate,” he said.

Sheryl Estrada
[email protected]

The following sections of CFO Daily were curated by Greg McKenna

Leaderboard

Navam Welihinda was named CFO at Grammarly, Inc., the provider of an AI-powered writing assistant. Welihinda will lead Grammarly’s finance organization and corporate development efforts. Most recently, he served as CFO at HashiCorp, where he led the company’s December 2021 IPO.

Patrick S. Brennan was appointed CFO of Selective Insurance (Nasdaq: SIGI), effective Oct. 1. He will succeed Tony Harnett, who will continue at the company as senior vice president and chief accounting officer. Brennan most recently served as treasurer of The Progressive Corporation, overseeing the motor insurance giant’s treasury, capital strategy, risk management, and investor relations functions.

Big Deal

Demand for electric vehicles and renewable energy has driven increased private equity and venture capital investments in battery energy storage, according to a recent report from S&P Global. As of Aug. 20, aggregate deal value in the space stood at $17.86 billion, compared to $16.17 billion last year.

Global deal value for the second quarter of the year came in at $9.91 billion, up $3.15 billion from 2023. The number of announced deals in the same period, however, fell 27% to 64.

“The major driving force behind this investment trend is the market itself,” said Arun Mani, a principal with KPMG’s U.S. power and utilities strategy practice, citing increased demand from AI-driven data centers as well as EV growth.

Going deeper

“Uninsurable homes are selling for all cash at a deep discount,” is a new report from Fortune’s Alena Botros. An estimated $1.6 trillion in property value of uninsured homes was at risk three years ago and 6.1 million homeowners were uninsured, according to the most recent data from the Consumer Federation of America. As companies increasingly refuse to cover properties because they’re located in severe weather zones or the housing stock is old, a worrying trend is only increasing.

Overheard

“My brain can’t even comprehend the pain that I’ve caused. That doesn’t mean I haven’t tried.”

—Caroline Ellison, the former Alameda Research CEO, FTX executive and girlfriend of Sam Bankman-Fried, said before being sentenced to two years in federal prison for her role in the fraud that led to FTX’s collapse, Fortune’s Leo Schwartz reported.