What is the difference between a Controller and a CFO?

Savvy business decisions based on solid financial data is the key to success. As a small business owner, you may be handling your own bookkeeping and accounting duties, financial reporting, and planning. But best-in-class financial strategy requires focus and expertise. Large corporations have a finance team, with a controller and a chief financial officer (CFO). How do these roles differ, and what does your company need?

What is a Controller?

A controller is a company executive that is responsible for all the organization’s accounting activities. They typically report to the company’s CFO if there is one. In a larger organization, a controller will oversee payroll processing and financial reporting, and they might help the CFO to prepare operating budgets. 

Controller vs. CFO? Smaller companies might combine these two roles. If there is no CFO, the controller must handle many different financial tasks, from routine bookkeeping to financial planning. They might get involved in company recruiting and training.

Depending on the company, a controller may:

  • Prepare monthly financial statements
  • Supervise accounting and bookkeeping staff
  • Prepare budgets
  • Outline budgeting schedules
  • Collect and analyze financial data
  • Monitor the company’s budget for trends, variances, and deficiencies
  • Help companies meet tax, licensing, and other requirements
  • Monitor legislation that can affect business operations
  • Help with tax filings

What Are the Main Differences Between a Controller and a CFO?

A controller is a tactical position responsible for compliance and reporting, whereas a CFO is a strategic leader responsible for all financial tasks including forecasting, planning and analysis. Controllers often do not make good CFOs, as they lack the out-of-the-box thinking required to innovate financial strategy; whereas CFOs often lack the discipline and rigor required to be a good controller.

A controller prepares financial reports like income statements and balance sheets. They also monitor internal controls, handle compliance audits, assist with budgeting and, to a certain degree, analyze financial information. Some controllers might evaluate and choose the technology to be used in the company’s financial departments.

CFOs tend to be involved in higher-level financial strategies and planning. A CFO will track the company’s growth and capital, provide an analysis of where the business is strong or weak, and develop a plan of action for improvements. While the controller is more typically focused on accurate financial reporting, the CFO is a financial planner. 

In some organizations, the difference between controller and CFO duties may not be well-defined and there may be some overlap.

Do I Need a CFO or a Controller?

Hire a controller if you:

  • Want verification and supervision of your bookkeepers and accountants
  • Want to ensure financial reports are accurate
  • Need someone to oversee the close of each financial period
  • Desire stronger processes to avoid mistakes, fraud, and security breaches
  • Need someone to assist the CPA during tax season
  • Are ready to hand-off your involvement in accounting

Hire a CFO if you:

  • You are looking to collaborate with an executive on business direction
  •  Are in need of higher-level reporting and analysis to drive company decisions
  • Unsure of the correct financial strategy for your company
  • Are in need of help managing cash shortfalls 
  • Need help designing a workforce reduction or turnaround plan
  • You would like to improve relationships with investors and lenders
  • Need assistance with equity or debt activities

Financial controller vs. CFO—which do you need? Most small businesses need both, which brings us to the third option.

A Complete Finance and Accounting Department through Outsourcing

Do you wish you could hire a part-time CFO and a controller without the cost and time commitment of a new employee? A factional CFO and fractional controller is a complete solution for most small businesses. By outsourcing our finance and accounting department, you get the benefits of both professionals for less than the cost of a single full-time employee. 

CFOshare — Your On-Demand Financial Partner

CFOshare provides your business with a team of financial experts at a significantly lower cost than a full-time employee. We will work with your existing financial team to bolster and supplement their capabilities, fill any gaps, and all for less than the cost of full-time equivalents. Contact us today to find out more about our services. 

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