Wed Dec 1, 2021 | | CFO Services, Financial Controller Services

CFO vs Controller: What’s the Difference?


cfo vs controller

Growing businesses may need more than just a bookkeeper or a team of entry level accountants that process the day to day transactions . For companies that are looking to reach financial milestones, or to take the business to the next level, it may be time to consider hiring a chief financial officer (CFO) or a controller.

How do you know which position is right for your business? Should you hire both a CFO and Controller? Or do you just need to hire one position? Before taking your financial strategy in the wrong direction, consider the advantages of a CFO vs. controller and which would be a better fit for you.

What to Know About a Controller

The truth is that your business operations may not require an executive team to run efficiently. You may just need one person to run the entire financial department.  Many smaller companies can thrive without having a CFO. In these cases, many small companies hire a controller.  Based on the size of your business, volume of work, and budget, having a controller run the accounting department may make more sense.  

In this position the controller serves as the head accountant, overseeing the day-to-day financial management of your business. A financial controller typically comes from a deep accounting background and in small businesses, typically is responsible for everything related to the financial aspect of the business, including but not limited to: payroll processing, processing invoices, financial reporting, cash flow forecasting, all the way to compliance audits.

In larger businesses, a controller is a senior executive who may report directly to the CFO and manages internal controls over the accounting team and provides information to keep the CFO in the loop about the company’s finances.

Job Responsibilities

What tasks can you delegate as controller responsibilities? This technical role can include managing accounts receivable, conducting operations oversight analysis, and creating and monitoring internal controls.

Depending on a firm’s size, controllers may also supervise the accounting department staff, participate in the accounting process during tax season, and coordinate hiring and onboarding of new additions to the finance team. They are more in line with financial reporting than they are with financial planning.

Education and Skills

Although many financial controllers may also be  CPAs, a controller does not typically require a higher educational level beyond a bachelor’s degree. It is common for controllers to  have at least 10 years of experience in accounting to show an increase of responsibility and higher-level accounting function along the way.

A controller should be trustworthy and detail-oriented. After all, this job involves access to financial information that a business owner does not want in just anyone’s hands.

What to Know About a Chief Financial Officer

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.

Job Responsibilities

How do a CFO’s duties differ from those of a financial controller? Both monitor internal controls and analyze accounting records, but a CFO wants to interpret those balance sheets in terms of a business’s overall financial health.

This role looks at annual revenue to identify the next steps for exponential growth. As a financial leader, this person may also address investors or the board of directors to share appropriate financial records, implement risk management procedures, and follow capital markets for acquisition assessment or capital-raising campaigns.

Whenever corporations need a public face for any speaking event, the chief financial officers also step into this role. They can announce new partnerships, discuss implications for security breaches, and provide answers to shareholders on behalf of the CEO and the organization.

Education and Skills

Unlike financial controllers, most chief financial officers have a higher level of education. It is common for CFOs to have an MBA as well as CPA or CMA status. They may have started in finance or investment banking rather than accounting, although they do have a thorough understanding of accounting procedures.

The average maximum salary of a CFO is higher than that of a controller, as it is commensurate with education, experience, and financial leadership you would expect with 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.

Taking a Side on Controller Vs. CFO

How do you decide between a controller and a CFO? You may want to start with a good, hard look at your company’s financial records.

Sticking With a Financial Controller

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.

If your growth exceeds your current financial system, you may want to look for a controller or consider a part-time CFO to help you with your financial strategy and long-term vision.

Expanding Your Financial Strategy With a CFO

Medium-to-large businesses may already have a controller on staff but need a different perspective on financial statements, fundraising, and expansion.

For businesses that already have a chief operating officer on staff, it may be wise to also hire a CFO who can oversee the financial close process, monitor and explain security breaches, and provide financial reporting that goes deeper than only operational accounting.

Companies hire CFOs and controllers for all sorts of reasons beyond a grand design. Some of these needs may be short term in nature; that’s when working with a fractional CFO or interim CFO who can oversee particular financial functions or tasks may be the best option.

Taking Financial Planning in the Right Direction

Instead of getting bogged down in financial statements and spinning your wheels, look to the future of your expansion by choosing a CFO vs controller. CFO Strategies LLC is here to help you every step of the way.

Our innovative services range from basic bookkeeping, controller services, to CFO services to help businesses with strategic planning. Our goal is to help businesses cut costs and improve their bottom line. We work collaboratively and customize the services we provide based on your company’s needs and wants. Feel free to contact us today for a complimentary business review. Contact us at (732) 236-4454 to learn more about what we do.