Wed May 6, 2020 | Alan Lefkowitz | CFO Services, Financial Controller Services

CFO and Controller: Assessing Your Company Needs

Chief Financial Officer (CFO)

Chief Financial Officer (CFO) is a strategic partner to the CEO and Senior Management, charged with financial responsibility for the whole company.

Key CFO Responsibilities:

Total fiscal oversight
Financial analysis and forecasting
Cash flow forecasting
Strategic planning
Risk Management, including insurance coverage
Develops tax strategies
Manages relationships with banks and auditors
Develops company performance measures
Capital management

Financial Controller

The financial controller is charged with managing the accounting operations of a company.

Key Controller Responsibilities:

Oversees the Accounting function
Generates financial and management reports
Manages cash flow
Prepares operating and capital budgets
Implements and maintains policies & procedures
Establishes and maintains internal controls
Ensures integrity of financial records

Are the Same Skills and Personality Characteristics Required for Both Roles?

An effective CFO often spends the earlier part of their career as a Controller. However, a Controller is not automatically the best candidate to become a CFO. Both positions require accounting and financial reporting knowledge, but the optimal skills and personality characteristics can vary.

Key Skills Required:

CONTROLLER	CFO
Technical knowledge of accounting principles	Technical knowledge of accounting principles
Skilled in the use of computer technology	Understanding of the business operations
Knowledge of effective processes within the Accounting Department	Knowledge of effective methods required for the overall success of the business
Knowledge of payroll and human resources	Ability to identify, hire, and mentor key employees, including the Controller.

Important Personality Traits:

CONTROLLER	CFO
Reactionary: Adept at attending to tasks that meet current needs	Strategic thinker; Always looking forward
Prefers hands-on accounting over interacting with others	Understands people; able to elicit ideas from others; a team player
Task and detail-oriented	Focuses on the big picture
Adheres to rules; compliance focused	Understands fiscal nuances
Logical; Everything has to make sense.	Ability to think outside the box

While all companies can benefit from having someone in the role of Controller and CFO, that is not always feasible.

Key Considerations:

CONTROLLER	CFO
Essential for all companies	Essential for growing and large companies
Hiring a Controller with the potential to step into the CFO role is optimal	Understands the role of the Controller and can effectively hire for this function.
Budgeting for this position is critical to ensure sound financial operating practices are in place and accurate financial reporting is provided on a timely basis	The goal of expanding revenue to provide the financial resources to fill this role is essential.
Can function as the Bookkeeper and Staff Accountant in a new or small company CFO	Optimally, it can also function as the Controller if needed.

A small company often does not have the financial resources to hire either a Controller or a CFO. In this case, consideration could be given to a part-time Controller with the skill set that allows them to also serve as a part-time CFO. The part-time Controller can oversee the bookkeeping function, generate financial reports, and manage day-to-day accounting functions. The CFO can partner with the CEO on strategic efforts, e.g., banking, business expansion, and assessment of company performance.