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This is especially true when it comes to distinguishing the roles of the chief financial officer (CFO) and the controller. While both Financial Controllers and CFOs are important members of a company’s management team, they have different roles and responsibilities. However, both positions are important in ensuring the financial health of a company. A controller’s job is to ensure that financial records and accounts are always accurate and up to date. The role is focused on the tactical steps required to ensure the organization fulfills its financial obligations and meets KPIs. They use data and reports supplied by the controller to evaluate the company’s financial health and work with other executives to shape the company’s strategic direction.
Controllers execute financial operations compliantly, enabling CFOs to apply strategic financial planning that charts the company’s overall direction and future growth. Controllers maintain the company’s financial records, ensuring the accurate recording of every transaction, including general ledgers, accounts payable/receivable, and payroll. In some businesses, a controller may wear so many hats that their role is not markedly different from a CFO. However, there may also be businesses where a controller reports to a CFO. Here are some of the subtle variations between CFOs and controllers based on the stage of the business, typical roles and responsibilities, and how each is positioned. The earliest you would likely hire a part-time controller would start at the $500,000 revenue threshold.
A CFO has the ability to understand, interpret and make plans from looking at financial data. A controller has the organization and attention to detail to create the financial report the CFO reads. Hiring a CFO means you will have someone on your team who can work closely to guide you towards the moves you can make right now, and what should be reserved for the future. They will also be able to partner with you to set your company on the path towards that future.
CFO’s and CPA’s work closely together; they need each other’s skills sets. But if someone is focused on being up to date on the thousands of tax laws cfo vs controller out there, are they able to forecast cash flow, do a cost-benefit analysis for an acquisition, or handle a refinance? At the same time, most CFO’s aren’t up to speed on depreciation rules or state by state filing requirements; the CPA is.
Purpose of the Role
A good controller is worth their weight in gold to any small or medium size business where cash management is a strategic factor in success. Although the tasks are basic, attention to detail is of the utmost importance in the bookkeeping profession. A few data entry errors can cost your company a significant amount of time and money. The bookkeeper, or the accountant, of your company is an essential element of your administrative team. Using vision and data, the CFO collaborates with the CEO to get company-wide buy-in for changes and new ideas.
The CEO’s Right Hand takes charge of your finance, accounting, human resources, and other foundational functions so you can focus on what you do best – running your company. We then arm you with reliable data so you can make confident and timely business decisions. Small companies (~$10MM in revenues) can expect to pay about $200,000 per year (including bonus, benefits, etc.). Alternatively, you can reduce your costs by outsourcing this function to a firm that offers fractional finance and accounting services. We’ll look at how CFOs and Controllers contribute to a company’s financial health, what their day-to-day responsibilities look like, and why both roles are crucial for businesses of all sizes.
Financial Decision-Making
It is their job to ensure that money is being paid and received promptly and legally. The CFO’s role in fostering relationships with investors, banks, and other financial partners is critical for securing the necessary capital and resources for sustained growth. Moreover, a CFO’s expertise in financial management and strategic planning becomes indispensable in navigating the complexities of larger operational scales. A controller is accountable for accurate financial reporting, budget management, and regulatory compliance.
CFO vs Controller: What’s the Difference?
For example, at The CEO’s Right Hand, we provide accounting and bookkeeping services along with outsourced CFO services with packages starting at $4,500 a month. This will provide you with the support you need at just a fraction of the cost. To truly drive growth, you need to master the art of strategic capital deployment. Our guide will help you to optimize the capital deployed and help transform your financial strategy into a powerful catalyst for real business growth….
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- We understand Biotech companies operate in a different environment and our team has deep expertise in the specific requirements your company will face.
- The most successful CFOs are effective communicators who can inspire confidence among employees, investors, and the broader market.
- CFOs are always thinking about how to move the company forward financially.
- A controller can manage automated processes and data daily, while a CFO provides strategic oversight, financial leadership, and alignment with automation-driven decisions.
- According to the 2021 Financial Hiring Guide by Robert Half, 71% of CFOs and senior financial executives view strong financial controls as essential for effective strategic decision-making.
Naturally, performance needs to be measured for businesses to improve. Two roles where the lines are often blurred are that of the Financial Controller (FC) and the Chief Financial Officer (CFO). With intensive strategizing and the utmost degree of accuracy in numbers, the requirements of a well-functioning finance unit take a lot of work to fulfill. Your CPA may have helped you to clean up your books and guided you through some of the most challenging years of your business. Most CFOs also possess a master’s degree, often an MBA, to round out their technical education with business and operational acumen. If you prefer to do the math for yourself check out our full-time vs fractional CFO calculator.
The Benefits of Hiring a Virtual CFO and Financial Controller
The CFO is traditionally ranked just below the CEO in terms of hierarchy. The controller reports to the CFO, sometimes alongside a treasurer and tax manager. A finance leader doesn’t need to overhaul their entire finance operation at once. Introducing finance automation in strategic functions enables CFOs and controllers to achieve quick wins while paving the way for digital transformation in other areas. Small businesses making less than a million in profits may work well with an accounting manager to generate income statements, track bank accounts, and attend to other bookkeeping responsibilities.
They are the backbone of accounting operations, overseeing audits, compliance issues, accounting controls, etc. The CFO is an executive who works to protect the overall financial health of a company. A Certified Public Accountant (CPA) has, among other requirements, taken and passed the Uniform CPA Examination given by the American Institute of Certified Public Accountants. However, it is common for CPAs to serve businesses as external independent consultants, supporting with financial audit services and preparing and filing business taxes. This is necessary to ensure accuracy and compliance with complex accounting rules and government regulations.
A CFO is also a visible leader in the eyes of both staff and external stakeholders, serving as the face of the company alongside the CEO. The most successful CFOs are effective communicators who can inspire confidence among employees, investors, and the broader market. Medium-to-large businesses may already have a controller on staff but need a different perspective on financial statements, fundraising, and expansion. After all, this job involves access to the financial information that a business owner does not want in just anyone’s hands.
It’s not unusual in a small company for the accounting manager to become the controller and then become the CFO. But without the requisite education, mindset, and experience, just having more years on the job doesn’t prepare the person for that role. Outsourced controllers are already trained in processes that save time. Far less training time is needed when you work with an outsourced controller. An outsourced controller will have experience in various industries, providing innovative solutions to old problems. In-house controllers may not have experience in your industry, missing opportunities to cut costs or amend business practices that may not be optimal.
