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It is an executive-level position held by individuals with significant experience, advanced degrees, and certifications. CFOs are responsible for financial planning, financial reporting, strategic management, asset management, and personnel management over financial functions. The CFO typically reports to the CEO and is the second or third-highest member of the C-Suite team. This role oversees the accounting department, tax compliance, budgeting/forecasting, and financial reporting. It is a senior-level management position typically held by those with multiple years of experience in accounting and tax management. In smaller companies, the Controller assumes various duties, including budgeting, reporting, and compliance.
The role is more specialized in larger companies as other responsibilities are shifted to the CFO. In small businesses, the roles of a fractional controller vs CFO complement each other. A fractional controller ensures daily financial operations run smoothly, while a fractional CFO can provide strategic oversight. This combination allows small businesses to maintain accurate financial records and make informed strategic decisions, all for less than the cost of a full-time finance executive. A Financial Controller is a senior-level executive responsible for a company’s financial management. They oversee the financial department and ensure that all financial reporting is accurate and compliant with regulations.
Key differences between CFOs and controllers
The average maximum salary of a CFO is higher than that of a controller, as it is commensurate with the education, experience, and financial leadership you would expect from high-level finance directors. A successful CFO should anticipate business risks, direct a company’s finance function, and fine-tune financial strategies to maximize growth potential. If a controller deals in the daily minutiae, then a CFO is all about the big picture. This strategic leader works with financial reports but is more interested in analyzing financial data and growing a company’s profitability. You may need an in-house CFO at either a large public corporation or a small private company, and while the financial strategies may differ, the responsibilities are similar.
Why Small Businesses Might Need a CFO and Controller
With an outsourced controller on your team, you will have access to accounting and bookkeeping expertise when needed. The deeper bench that outsourcing offers is one of the major benefits of outsourcing finance and accounting roles. The controller carries out the implementation and day-to-day management of the operations of the accounting department. The controller’s oversight and account management enable the CFO to meet the company’s larger strategic goals. Controllers are typically accountants with expertise in financial management operations, including bookkeeping, financial reconciliation, and reporting accuracy.
CFO Hub — Outsourced Financial Professionals for All Your Business Needs
Though it’s not always required, many CFOs hold MBA degrees or other advanced financial certifications. Controllers usually have a strong accounting background, often with CPA certification. CFOs are always thinking about how to move the company forward financially. Having everything centralized in TaxDome helps us, and it helps the client.
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. It’s the financial controllers that turn numbers into reliable and actionable intelligence. The cost and commitment of a full-time CFO may be too much for smaller organizations. Fractional CFOs perform all the same functions as full-time CFOs and can help you solve specific financial problems on a part-time basis. This means business owners can get a long-term partner who can provide the advice they need at a “fraction” of the cost. Given this background, a good controller will be well-versed in the day-to-day requirements of running an accounting department.
- The answer to this question depends on the size and complexity of your business.
- To help clients, prospects, and others, Hanson & Co has summarized the key considerations below.
- As the business grows, so does the need for distinguishing these roles.
- A key difference between a Financial Controller and a CFO is the strategic input they provide.
Depending on the size of the organization, a Controller may perform some light bookkeeping and accounting tasks. In smaller organizations, a Senior Accountant may fill the Controller role, or the level of complexity may not warrant Controller-level supervision. Many times we are asked, if I already have a CPA, why would I need Lucrum.
With the advent of automation tools simplifying compliance and reporting, there is an increased emphasis on controllers to play a more significant role in growth strategy. The controller is expected to microscopically analyze internal financial operations, and strategize towards revenue growth. A Controller oversees and manages the accounting department – reviewing and reconciling accounts and providing financial reporting to management. The Controller is responsible for overseeing the company’s A/P, A/R, Payroll, ledger and more. This is an important distinction because each role requires a related but nuanced skill set and serves a different need. And, they may even have experience with capital raising and/or building and selling successful companies.
A controller has four tiers of accountability, each with its own responsibilities. Companies hire CFOs and controllers for many reasons beyond a grand design. Some of these needs may be short-term; that’s when working with a fractional CFO or interim CFO who can oversee particular financial functions or tasks may be the best option. If you would like to learn more about how fractional CFO services work and can support your growing business, please schedule a free, no-commitment consultation with one of our CFOs.
Controller salaries vary depending on experience, the size and location of the company, and the complexity of the industry. Controllers at small companies (~$10MM in revenues) typically make $150,000 annually. Factor in variable compensation, benefits, and taxes, and you’re looking at a total cost of approximately $200,000 per year. On the other hand, middle-market companies can expect to spend closer to $300,000 per year all in. As companies grow, they often add a CFO position to focus more on strategic financial planning. Whether you’re a business owner, a finance professional, or just curious about corporate structures, understanding cfo vs controller these roles can give you valuable insights into how companies manage their finances.
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For instance, controllers and CFOs both play integral roles in a medium- to large-sized company’s financial management team. Although they may be used interchangeably and have some skill and job crossover, they’re different positions. Whether a company needs both a CFO and a controller depends on its size, complexity, and stage of growth. Smaller companies often find that one role can cover both functions or that they only have enough work to support a part-time or fractional CFO.
CFO vs Controller Infographics
Also, the CFO may be working overtime to get all the information they need to make accurate decisions. They must also ensure that financial policies and procedures are effectively integrated across the entire organization. This requires close collaboration with department heads, particularly those in IT, sales, and operations. You may want to start with a good, hard look at your company’s financial records.
A CFO’s tiers of accountability are economic strategy and forecasting, and treasury responsibilities. Likewise, automation gives controllers less to worry about when it comes to compliance risk and cost management. It enables them to scale their departmental operations effectively as their companies grow without adding resources or incurring new operating costs.
