Difference Between Role of Treasurer and Controller

Difference between Role of treasurer and controller with respect to Financial Corporate Governance

Organization Graph of the Financial Management

The chief financing executive works straight under the president or the managing director of the company. Besides daily habit network, the individual in charge will keep the Plank of Directors informed about all the phases of business activity, including economics, communal and political trends affecting the business behavior. He also furnishes information about the financial position of the business by reviewing it every once in awhile. The chief fund exec may have many officers under him to handle his function. Broadly his functions are divided into two types:

  1. Treasury function

  2. Control functions

An illustrative firm chart of fund function of management in a major firm is shown below:

Organization of the Financial Management Function

Role of Treasurer

The main role of Treasurer is the fact that he identifies the financial official and then looks at the task of financing and its own related activities. Treasury always handles liquid assets therefore the primary role of treasurer is to look at the cash and its other liquid investments.

Some important tasks of Treasurer are as follows:

  • He formulate the complete capital composition of the business relating to goals of the business and then to apply it to the business.

  • He also manages the quantity of liquid assets and everything kind of cash.

  • He basically serves as a cashier.

  • He plays the role of your expert signatory on payment cheques like the authority to approve such cheques.

  • Reconciliation in loan company accounts.

  • He manages the overall credit function of the company.

  • He also offers the authority to utilize the surplus cash of the business whenever there is any kind of short term beneficial assets.

  • He also makes the companies policies matching to decision on trade special discounts and vendor repayment.

  • He also maintains romantic relationships with bankers and distributors.

All of the above mentioned functions of treasurer are integrated by making use of cash manger, fund manager and credit supervisor.

Role of controller

As we have already seen that the treasurer handles liquid investments, the controller of the business has to track record the transactions of the liquid assets. It is the put together and effective working of both the departments that give rise to a highly effective system of internal controls. Controller is a financial officer responsible for accounting and control.

He does the next functions:

  • Records all the transactions in the overall ledger, the accounts receivables and the accounts payables, sub-ledger, transaction regarding fixed possessions such as depreciation, inventory control, etc.

  • He checks the areas of taxes and insurance.

  • He also keeps track of company's short term investments by recording and reconciling the transaction with those of the brokerage firms.

  • He carefully checks the regulatory aspects and execution of the company's insurance policy on trade special discounts and recievables maturing.

  • He always operates as the look director.

  • He keeps a record of the attendance of the employees, their motion timings in order to facilitate in organizing the payroll.

  • He accounts information to the management.

The office bearer who assists the controller in accomplishing the above tasks is: tax manager, data processing supervisor, cost accounting manager and accounting director. Thus the functions of financial accounting, internal audit, taxation, management accountings and control, budget-planning and control are accomplished in this manner.

Controller's and Treasurer's functions in the Indian Context

The controller and the treasurer are essentially American conditions. Simply the American structure of dividing the financial executive's functions is not being generally followed in India. We do have lots of copies having officials with the designation of the controller. The controller or the financial controller in India, by and large performs the function of a key accountant or management accountant. The official with the title of treasurer can also be found in a few companies in India.

The controllership functions can prove to be useful under the Indian framework, but presently a few of these obligations are performed by the company secretary in India. His tasks, for example includes property control and security, maintaining data and preparing studies and administration reporting. The economical appraisal function is normally performed at the top level in India. Some other functions, such as inside audit, can be brought within the fold of the controllership functions, if this concept is developed in the Indian framework.

It should be understood that the financial controller does not control finances; she or he develops, uses and interpret information- some of which is financial - for management control and planning. Because of this, the financial controller may simply be called as controller. Management of funding or money is another and important activity. Typically, the accountants have been involved in managing money in India. However the difference in handling money resources should be liked.

In the American business, the management of funding is treated as a separate activity and is being performed by the treasurer. The title of treasurer hasn't found favour in India to the magnitude the controller has. A number of the functions performed by the treasurer in the American context are again discharged by the business secretary in India. Insurance coverage can be an example in this regard. The function of keeping relations with investors may now assume relevance in India because of the development in the Indian capital marketplaces and the increasing consciousness among buyers.

The general title, financial manager, appears to more popular in India. This name is also better than the name of treasurer since it conveys the functions involved. The primary function of the financial manager in India ought to be the management's of company's cash. The financial duties may often be combined with others. However the significance of not incorporating the financial manager's responsibilities with others should be became aware. The managing of money- an extremely valuable resource- is a company activity requiring remarkable skill on the part of financial administrator. He should ensure the maximum use of money under various constraints. He should, therefore be allowed to devote his full energy and amount of time in managing the amount of money resources only.

Functions of Treasurer and the Controller

CASE STUDY

The role of the organization treasurers has changed from a traditional one of securing funds and taking care of financial risk to a tactical one of driving a vehicle overall business initiatives. On this new role, treasures possess the primary responsibility of advocating better corporate governance key points in the business, both as a way to increase the shareholder value and enhance investor self-assurance. This has become very important because the corporate governance methods of the companies are being placed under heavy scrutiny from the regulators and investors pursuing revelations of corporate and business malfeasance, deception and scam. This article talks about the role of the treasurers in creating a sound governance framework in the firms.

Description

The debacle in Satyam Personal computers Small, India's fourth largest software company, has taken the problem of corporate governance in limelight more especially in India. It is however regrettable that such important issues gain prominence only after occurrences of corporate frauds. The issue of corporate and business governance was before debated when the trends at Enron and WorldCom rocked the globe.

As India is on a growth trajectory and it is having ambitions to be positioned in the counters of the developed economies, the issue of corporate and business governance only being surfaced following the Satyam con is a grave concern. We may claim that the Satyam fraud can be an isolated circumstance in commercial India, but it is more important to observe how the others of world assesses our seriousness for the ethics of commercial governance. Do we take the ethics of corporate governance really and deeply and drift it away from its ornamental value to perform an enterprise towards the main goal that the organization governance term was coined? Generally the practice is to beautify the plank, which reaches the helm of affairs of corporate governance, with people whom the promoters of the business believe will then add ornamental value to the organization. Many a times the promoters induct known people onto the panel. Having said that companies prefer the attractive value of the table over its usefulness. Thus one can certainly conclude that the Satyam fiasco is nothing but a true reflection of what consistently and pervasively passes for commercial governance.

The role of treasurer is vital to today's business especially in making certain the company gets the cash that it needs to operate the business enterprise, satisfactory risk management systems are set up and finally making certain the business complies with the many international standards. The treasurer and cash have a consanguineous relationship and the recent fiasco of Satyam Pcs reveals a story of siphoning the money from the company's balance sheet which sets the role of the treasurer or CFO only on dubious differentiation. From the mere classification of a treasurer one realizes that wherever there is cash in the company, the treasurer needs to be present there. Although Satyam fraud is apparently a systemic scam by the mature management, nevertheless such frauds can be mitigated to some extent if corporate and business governance is compiled by the treasurer. In that scenario it becomes totally more important for corporate treasurers to revisit the basics of corporate and business governance and their role in inculcating the guidelines of corporate and business governance in a company. This article shows and revisits the role played by the treasurers or CFO in the conformity of corporate and business governance.

Treasurer in Detail

The Treasurer's role is the next most significant function on the Panel from then on of the Chair. Financial accountability is important to not-for-profit organisations. Should your members haven't any self-confidence in your capability to regulate and take into account finances, they will have no confidence in the company as a whole.

The Treasurer may find a reluctance amongst non-financially trained mother board members for taking any responsibility for finance. As a Board or governing committee however, the group all together has to discuss responsibility and decision-making and it'll therefore be an important part of the Treasurer's role to ensure that others understand the info that is being presented and the implications thereof. It really is particularly important that the Treasurer attends meetings regularly to ensure that others can ask questions and be certain they have a full understanding of the association's budget.

Purpose

To manage and report on the association's budget.

Responsibilities

  • To carry out the obligations of an associate of the Board of Directors.

  • To business lead budget planning and arrangements.

  • To monitor the budget and inform the Board concerning whether projections are turning out as forecasted to ensure that joint decisions can be made on appropriate changes.

  • To ensure the Board's financial plans are being adopted.

  • To report to the Plank of Directors and the general membership on money.

  • To put together any required financial reporting forms.

  • To ensure duty polices are complied with VAT.

  • To manage and maintain bank accounts, guaranteeing the association gets the best rate of come back for funds presented and moving money between accounts as

  • To oversee all financial ventures.

  • To signal cheques (with a second signatory from the Mother board or staff).

  • To chair funding sub-committee, if one is present.

TREASURER WORKING WITH A BOOKKEEPER.

Most treasures do not have bookkeeping expertise, and they need not - and essentially shouldn't - spend their time on day-to-day financial supervision. Whenever we can, a suitably experienced/skilled paid (or volunteer) bookkeeper should be accountable for banking, for control obligations, for keeping full and appropriate accounts of all receipts and expenditure as well as for producing financial records.

This leaves the Treasurer's time for a lot more proper and managerial aspects of the role, in particular budgeting and planning. The Treasurer does however need to keep an eye on the work of the bookkeeper as ultimate responsibility for the correctness of records is placed with his or her role.

If your connection needs to post formal annual assertions to taxes or other government authorities, these may prepare yourself because of your bookkeeper or by exterior accountants. Requirements will vary in several countries. In the united kingdom, all limited companies will need to have their last accounts made by a chartered accountant.

Becoming an excellent Treasurer

A treasurer doesn't have to review accounting or business to carry out well at this position.

A good treasurer will be seen as a the following characteristics:

1. Honesty and Integrity: As treasurer you are not given free liberty to do whatever you like. Alternatively, you are accountable to God, the fellowship and the committee. Therefore, perform your activity properly and appropriately.

2. Carefulness: This feature can help you maintain exact and up-to-date files. Be careful to track record all transactions. Be careful when managing money because eventually this money belongs to God.

3. Common sense: Common sense is necessary in order to catch errors early.

4. Open literature: It is good to maintain an open book coverage concerning financial matters. Any member of the fellowship, after appointment with the committee, should be able to start to see the financial state of the fellowship. This will help build accountability and trustworthiness for the entire fellowship.

5. Watchful vision: The treasurer needs to be vigilant in tracking income and bills. These sums should be weighed against the existing budget.

6. Faithfulness to God: Finally, the treasurer brings honor to God by the proper exercise of his/her task. Therefore, view your situation of treasurer as a way to show your faithfulness to God. Here's an excellent maxim: God's work done in God's time will obtain God's provision.

Controller Vs Treasurer

While the word Controller can be used in different ways in Sweden than in America, there is reason for a clear reason of the differences between Controller and Treasurer. The fact that a Controller in Sweden has a broader role than the Controller in the us can be described largely by the function of the treasurer that has those duties overlapping those of the Swedish Controller.

In large firms, the financial procedures overseen by the CFO will put into two branches, with one headed by the treasurer and the other by the controller. The Controller's responsibility are mainly accounting in characteristics. Costs accounting as well as finances and forecast regarding internal consumptions, is situated within the area of the Controller.

The treasurer's responsibility land into the decision areas most commonly associated with financial management, invest financing and property management. The business chart may give you false impression that a clear splits is present between controller and treasurer tasks. In a well-functioning company, information will flow easily backwards and forwards between both branches. In small firms the treasurer and controller functions may be merged into one position with a ensuing commingling of activities.

Traditionally the role of controller has been that of a number cruncher, processing financial data to be able to prepare reports. The assignment associated with the controller role is by no means set in stone, different organizations have different obligations mounted on the Controller.

The final statement where in fact the controller should be observed as an extended range creator of executives, tips at a visible role when it comes to developing recruiting within organizations. For the controller's section to become designers of accounting and operating executives they have to have an intimate regards to the workers of the business.

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