What is financial controlling?
Managing a company’s finances, in particular the income and expenditure side, is called financial controlling. The person responsible for managing this area is called the controller or financial director. Financial controlling includes the management of all aspects of revenue generation i.e production to sales, accounts receivable and payable, taxes etc. It also encompasses budgets and cash flow forecasting. The latter takes into account the expected cash receipts and payments at a group level as well as at an individual company level. If there are several companies in a group, the cash flow is projected by means of intercompany transactions such as transfers between subsidiaries and parent companies.
Why is Financial Controlling important?
The controller ensures that the company’s management has the financial information it needs to make financial decisions. The data are necessary for planning, decision making, controlling and reporting on financial performance. The controller ensures that the managers use the numbers in making their own decisions. Managers should be able to easily understand and analyse their performance, and make take appropriate actions to improve it.
