The CFO's view on the most valuable competencies in financial controllers

There is a calm atmosphere at BARK – a restaurant located in the large atrium that connects the two wings of Crowne Plaza Copenhagen Towers.

In the impressive space, where concrete, steel and glass stand in a contrasting combination with extensive plants, Christian Jakobsen and Jacob Poulsen have arranged to meet for a conversation about financial controlling and compliance – specifically: What should a competent group and financial controller be able to do according to a CFO?

A conversation that is prompted by the fact that there is quite a lot hidden in a group and financial controller's professional toolkit. Something that is also reflected in the diverse competencies Christian Jakobsen highlights throughout the conversation. Competencies that apply to both a financial controller in group finance and a financial controller in a local subsidiary. (In the rest of the article, we simply refer to them as financial controllers.)

The first competency Christian Jakobsen mentions has its roots in accounting. With his 5 years in auditing and subsequent 15 years in areas including controlling and financial management in the transport industry, he understands the value of precisely that foundation.

"A toolkit with accounting skills built from the auditing, consulting and financial sectors or in a traditional company is, for me, an important starting point in the role as financial controller," Christian Jakobsen begins.

"For example, as an auditor you move up through a complexity chain, where you first build accounting understanding by learning to keep books and understand the various accounting standards, and you learn to check whether the figures add up and to obtain the necessary documentation as a basis for quality assuring the accounts," he explains and adds: "Furthermore, with a career in the auditing industry you gain experience in handling cross-pressures, complexity and prioritisation in what can sometimes be a large number of tasks. A valuable experience in the financial year cycle – particularly leading up to year-end."

"Yes, so the ideal financial controller is self-organising and can thrive in the fact that there is a need for flexibility in certain periods," Jacob Poulsen concludes and looks with an appreciative expression at Christian Jakobsen, who nods and continues to the next competency.

"At NTG we strive to optimise and automate processes. This means we free up time, where budget models and standard reporting are largely automated. Which naturally requires that internal controls are in place to minimise the risk of errors. The core is therefore to have efficient processes with enough controls so that errors do not occur – and conversely controls that do not create inefficient processes."

Christian Jakobsen takes a short pause and continues: "Balancing that requires skilled financial controllers who have an understanding of both the processes and the controls within them. And it is a difficult balance. If you do not hit it, the outcome is either an overly comprehensive and cumbersome control environment or processes with holes and great risk of errors."

"Then there is business understanding, which is the competency we have the most difficulty finding. Because you need to have quite a lot of substance in your knowledge about running business in a given industry before it translates into deep business understanding."

"Yes, and if you do not understand the business, you cannot find the errors," Jacob Poulsen adds.

Christian Jakobsen nods. "Exactly. That is the basis for you as a financial controller being able to express yourself and have a relevant dialogue about the figures. And you only build business understanding by repeatedly approaching with curiosity why the figures look as they do, or change. A curiosity that again forms the basis for you being able to analyse your way to understanding how the figures across the business connect," he continues and thereby talks his way into the next two competencies ...

"The analytical ability is crucial for being able to combine concrete business knowledge with the financial figures: If the company has won a new large customer and has raised prices across the markets, but sees neither an increase in revenue nor earnings, the curious and analytical controller should question the two opposing circumstances. Perhaps they will find that the increased prices are the cause of lost volumes in the base business, which causes a larger decline than the addition of the new customer."

"If you possess an analytical sense and are curious, you are thus able to see through complex connections between the financial figures and the commercial events out in the business. Conversely, you can also see through it if the financial figures do not match reality," Christian Jakobsen states.

Which connects somewhat with the fifth competency.

The critical sense is also essential. Because it is alpha and omega that you are comfortable with questioning the correctness of the figures. It may be that you discover irregularities in the reporting, and that on that basis you dare to engage in dialogue with the business to examine the correctness of data and information."

"The critically thinking financial controller does not blindly use the figures to make decisions," says Christian Jakobsen with both warmth and seriousness in his voice.

Overall, it is valuable to have profiles who seek the big picture, Jacob Poulsen and Christian Jakobsen agree.

And it is here that the conversation expands from the five points that were actually its basic premise. Because we are still missing two competencies that also relate to seeking the big picture, but which are so essential that they require their own points.

"You also need to have a good system understanding and know how you can support the processes in finance with systems. Which is a competency that connects with process understanding," says Christian Jakobsen and continues: "If you have a financial controller who encompasses both, they have an understanding of how the company's financial systems and data work together, how workflows and processes contain interfaces across departments and thus the opportunity to locate optimisation and digitalisation potentials in the finance function."

"All of this is something that contributes to you understanding where the figures come from. And it is extremely important that you can use and work in the systems yourself, so you are not dependent on others," he rounds off his point.

"Yes, as a financial controller you must not be system-shy if you are to be able to support the digitalisation of the finance function," Jacob Poulsen interjects.

He casts a quick glance at the notepad he has placed to his right and notes: "And then we are still missing one more competency: the ability to communicate".

"Yes. It is an obvious, but not insignificant competency," Christian Jakobsen confirms.

"Because it is the way you build a bridge between the finance department and the rest of the organisation and become a sparring partner. Precisely therefore it is not just about being able to present figures," Christian Jakobsen explains.

"A financial controller must be able to translate complex financial data into meaningful information for different target groups. From discussing accounting technical details with the auditor to presenting KPIs for the sales team or giving a concise status report to the management."

Jacob Poulsen nods in recognition: "It is about reading your recipient."

"Exactly," Christian Jakobsen responds. "You must be able to adapt both language and level of detail. It requires situational awareness to know when and how you should communicate irregularities in a constructive way."

"And when it comes to financial controlling and compliance, it is an art to be able to simplify without oversimplifying."

Christian Jakobsen stops the flow of words for a while and points out: "In reality, the most important thing for me as CFO is to put together a team whose competencies complement each other."

Jacob Poulsen interjects questioningly: "So you mean that it is the team that for you must become the ideal candidate, because the ideal candidate does not exist?"

"You could say that, if we put it to the point," Christian Jakobsen responds smilingly. "At NTG the team is built around different positions, where each employee has 'subject matter expert' competencies within two to three professional areas," Christian Jakobsen concludes, before the conversation branches further to the years in the auditing industry and the many other topics that otherwise fill Christian's desk this afternoon.