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
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 knowledge of accounting and financial reporting, but the optimal skills and personality characteristics can vary.
Key Skills Required:
|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 processes 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:
|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 nuance’s|
|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.
|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
|Optimally, 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, and as the CFO can partner with the CEO on strategic efforts, e.g., banking, business expansion, assessment of company performance.