Category: Sectors

What is controlling? Definition, tasks, career

In a fast-paced and highly digitised business world, controlling is playing an increasingly important role. Here you can find out what controlling actually is and which tasks fall under the controller's remit.

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Controlling has changed a lot over the last few years. The notion of maths nerds who sit in back rooms looking at huge Excel spreadsheets is largely outdated. Today, controlling is a key component of modern management. Controlling provides companies with tools to help assess the performance of their internal processes in a well-founded and data-supported manner. This is why controlling lays the foundation for successful and sustainable decision-making processes within companies.

Controlling – definition: 

Controlling is an area of corporate management that deals with the management and control of all corporate divisions based on numerical data. In particular, the work involved in controlling includes recording, evaluating, analysing and aggregating all accounting items. Budget planning is also a part of controlling. The controlling team or department of a company usually works directly for the company management and prepares regular reports.

The word "controlling" refers to the department's control function. However, this term doesn't do justice to the current fields of activity in controlling. Controllers today are actively involved in shaping, managing and coordinating internal company processes.

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Typical tasks in controlling

Tasks in controlling vary depending on the industry, company size and corporate philosophy. These differences aside, there is however a range of tasks that controllers typically carry out as part of their daily work.

Typical tasks in controlling include:

  • Budget planning: regular budget planning involves allocating money and resources to various business activities. The budget is always created for a specific time period and forms a key component of management for finance.
  • Sales forecasting: on the basis of historical data, market analyses and estimates for the future, controlling is able to create sales forecasts for specified periods of time.
  • Reporting: controlling usually reports directly to management on a regular basis about the development of all the key company figures and KPIs.
  • Recommendations for action: on the basis of KPIs, benchmarks and key company data, controlling is able to provide management with well-founded recommendations for action and quantify the projected impact of these measures.
  • Controlling operating procedures through KPIs: by continually monitoring operational data, controlling is able to identify weaknesses and specify optimisation measures.
  • Target/actual comparisons: the constant comparison of actual data with plan data is part of a controller's everyday work and allows them to react to new developments promptly.

In addition to the typical work mentioned above, modern-day controlling often involves many ad hoc requests, most of which come from management. Whenever management wants to get an idea of a certain issue, it speaks to controlling and expects a prompt, well-founded ad hoc assessment. These last-minute requests mean that a career as a controller for finance is very varied and exciting, but can also be stressful and involve working overtime.

Operational controlling vs strategic controlling

A distinction is often made between the operational side of controlling and the strategic side. The main difference between these two areas is timescale: while operational controlling is geared towards the short-term monitoring, controlling and optimisation of operational processes, strategic controlling is about looking further ahead, without taking set periods of time into account.

  • Operational controlling: operational controlling involves the short to middle-term planning, control and monitoring of business processes. Operational controllers mainly focus on monthly, quarterly or annual assessments and deal with liquidity, cashflow, budgeting, target/actual comparisons and cost accounting.
  • Strategic controlling: strategic controlling predominantly looks at qualitative data and uses this for strategic decision-making. In order to be able to make strategic recommendations for action, strategic controlling uses tools such as SWOT analysis, competitor analysis or benchmarking.

An overview of the key performance indicators in controlling

If you are interested in a career as a controller, then you should familiarise yourself with key performance indicators during your studies. This is because these performance indicators, also known as KPIs, impact your everyday work in controlling and allow you to analyse complex interrelationships on the basis of meaningful characteristic values.

Here is an overview of some of the key performance indicators in controlling:

  • Equity ratio = equity / total capital
  • Gearing ratio = borrowed capital / equity
  • Debt ratio = borrowed capital / total capital
  • Operating margin = operating profit / revenue
  • Return on Investment = operating margin * capital turnover
  • EBITDA = Earnings before Interest, Taxes and Depreciation
  • EBIT = Earnings before Interest and Taxes

In addition to the above-mentioned KPIs, there are several additional performance indicators that play an important role in a controller's everyday work. Many controlling departments also have individual performance indicators that are well suited to their particular industry or company.

Starting your career as a junior controller

Many controllers have a degree in business administration. However, this isn't the only way to get your foot in the door in the world of company figures. A degree in maths or statistics would also provide you with good grounding for a finance job as a controller. We recommend gaining practical experience in controlling during your studies, for example as part of an internship or a work-study job. This is the quickest way of finding out if a numbers-based job in controlling is right for you.

Search for interesting job offers in controlling on JobTeaser.

In addition to academic and professional qualifications, you should have certain soft skills if you want to become a controller. In particular, these include:

  • Analytical skills
  • Logical thinking skills
  • Playful approach to numbers
  • Team-working skills
  • Precise, detail-oriented and forward-looking way of working
  • Strong resilience skills
  • Good knowledge of English

You can see that a lot is expected of you as a controller. On the other hand, the high level of qualifications needed to be a controller means that salaries are above average. You can expect to earn a starting salary in the region of £45,000.