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.