if a firm is facing financial problem then explain whether role of firms treasurer.or controller is important and how.
Answers
Treasurers and controllers both serve important financial functions within a company, but their responsibilities are quite different. Financial controllers head the accounting department, in a way, since they supervise the accountants and manage the books of the company. They make sure that the financial reports are done in a timely and proper manner for the management’s review.
Treasurers, on the other hand, are essentially financial advisors to their management. They look into the economic atmosphere of the industry and advise management on the proper way to handle possible economic changes.
In order to understand the distinction between these roles, it’s necessary to look at the individual functions.
WHAT ARE THE FUNCTIONS OF A CONTROLLER?
A controller is in charge of the company’s accountants. They are the highest in the food chain, as far as accounting goes. A financial controller is in charge of supervising the preparation of financial reports and presenting them to management. In some governmental organizations, a controller is also known as a financial comptroller.
A controller reports to the chief financial officer (if the company has one), formulates policies for the company and oversees the audit, budget and accounting departments in their company.
The primary responsibility of the financial controller is producing and presenting timely reports. These reports form the basis of the management’s decisions and economic predictions. They are also tasked with explaining to the management what the various items of the financial statements mean and, in some ways, offering advice following the reports that they present.
Controllers are also responsible for the company’s compliance with the law regarding taxes and other financial matters. They will be the ones who are directly presenting compliance documents and filing tax returns.
A controller should hold a degree, majoring in finance, economics, or business. They should also be a licensed CPA, ideally with at least five years of experience as an accountant. This will ensure they have been exposed to creating financial statements and have the expertise necessary to perform in such an important role.
WHAT IS THE ROLE OF A TREASURER?
While the controller is in charge of the accounting department, the treasurer oversees the finance department. In some companies, controllers can be referred to as the vice president of finance. Their main responsibility is to help their company grow its funds and invest the money they have wisely.
The treasurer is the person who helps the company grow its revenue. He or she builds and nurtures relationships with banks and investment companies so that they know where the best place is to invest the company’s money.
Because treasurers are involved in growing the company’s investments, they will manage relationships with shareholders. They do this by effectively communicating the company’s goals and plans for achieving its fiscal targets.
The treasurer, being the person best suited to explain the company’s financial position, is tasked with communicating with potential and current investors. It is up to the treasurer to explain how the company is doing financially and how it plans to remain profitable and beneficial to its investment.
The treasurer ensures that the company’s resources are invested in the most profitable ventures by forming and maintaining healthy relationships with investment banks.
Just like the controller, treasurers should have a degree in finance, accounting, economics, or a business-related course. They need to be excellent communicators, seeing as they will constantly be interacting with people in the banking and corporate sectors.
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