The parametric array loudspeaker (PAL) modulates the audio signal on an ultrasonic carrier. When the modulated signal is transmitted in air, an audio beam is created based on the nonlinear acoustic principle. Each modulation method has advantages and disadvantages. The frequency modulation (FM) is favorable for its low cost and high volume, but the tradeoff is its complicated nonlinear distortion, which is difficult to be reduced. In this paper, the Volterra filter is adopted to model the nonlinearity of the FM-based PAL. A novel complex inverse system is devised to effectively reduce the nonlinear distortion. Three practical aspects are addressed. First, the computational complexity of the Volterra filter is reduced by the parallel cascade structure with almost no compromise to the model accuracy. Second, Volterra filters are identified at discrete input levels to treat the nonlinearity that keeps changing with the time-varying audio input. Third, when the input level is high, a separation approach is proposed to refine the identified Volterra filters, which eventually improves the performance of the proposed inverse system.