Though CFOs and Controllers have similar job descriptions and work closely together, there are key differences in their roles within an organization. If your business is considering filling in either or both roles, it means your organization is taking a step forward and are ready to beef up your finance team to match the growing potential of your business.
Let us dive into what a CFO and Controller are, how they are similar, where their differences lay, and which role would benefit your organization the most.
Chief Financial Officer
Roles & Responsibilities
A CFO is typically a senior-level executive who manages the financial actions of an organization. A Chief Financial Officers has their hands in everything financial including:
- Tracking cash flow
- Implementing and maintaining accounting procedures, processes, and policies
- Creating and delivering financial reports
- Prepping a business’ budget
- Locating and reporting budget variances
- Generating and reporting financial operating metrics
- Risk management
- Handling negotiations with suppliers and vendors
- Deciding on future investments and strategies
The CFO position is typically for established, experienced professionals with backgrounds in accounting, investment banking or financial analysis. Education requirements are a bachelor’s degree in either accounting, finance, or economics. Common certificates that CFO’s have are Certified Public Accountant (CPA) and Certified Management Accountant (CMA).
Chief Financial officers usually work closer to all other high-level executives within an organization, but they are also typically subordinate to just the CEO. Though subordinate, CEOs rely on CFO’s to be the leading decision-maker on all financial matters of an organization.
A CFO can typically be compared to a treasurer or controller since they are responsible for managing the finance aspects of a business. CFO differs from these roles though because they are involved in fundraising, investment planning and are a key role in overall financial strategy across departments.
Roles & Responsibilities
Controllers, sometimes known also as financial comptrollers or chief accounting officers, oversee the day-to-day accounting functions within the accounting department such as:
- Prepping financial reports
- Analyzing and reporting financial data
- Monitor internal controllers
- Preparing and delivering income statements
- Managing financial transactions
- Developing best practices for financial growth
- Risk management
- Coordination of the audit processes
- Handling individual and companywide tax matters
Controllers must, at the very least, have a bachelor’s degree in finance, business administration or accounting but a masters is preferred. Most controllers also have certifications such as CPA, chartered global management accountant (CGMA), chartered financial analyst (CFA) or certified management accountant (CMA).
An additional role Controllers have is staff management duties through the financial department of an organization. Some organizations have a whole team of accountants overseen by a controller while in other businesses a controller is the only accountant.
Controllers also have a hand in evaluating and selecting technology for the finance department to ensure the best technology to conduct best business practices. We see plenty of overlap between a CFO and a Controller, but a controller’s responsibilities typically end at ensuring accurate financial reporting and are responsible for only one department.
When Why and Who To Bring In
Now that we have outlined the job description and different responsibilities of both CFO and controller, it is time to figure out when and why you should integrate them into your organization.
Below is a graph that provides a little more insight on which situations require a CFO vs a Controller.
WHEN YOU MIGHT NEED A CFO
- Oversight of a finance team whenever they need more guidance, order, and better supervision of performance.
- The need for more accurate, timely reporting.
- The need for a strong leader for an organization’s financial strategies including investments, fundraising, long term projections and pricing decisions.
- Interaction and reporting for stakeholders.
- Minimum annual revenue of $1 million (for at least a part-time CFO).
WHEN YOU MIGHT NEED A CONTROLLER
- Oversight for bookkeeping when the CEO or owner does not have time for proper bookkeeping and monitoring.
- When someone needs to take over internal controls to aid in preventing errors, fraud, and security breaches.
- Greater ownership of accounting processes.
- When a CPA needs more adequate support and assistance during tax season or during audit processes.
- Annual revenue of at least $500,000.
There are some other key differences organizations need to make note of when deciding between a CFO and a Controller.
Hierarchy – A CFO outranks a controller in most companies and usually is right under a CEO. They handle all financial aspects within a company while controllers typically manage the accounting department and delegating tasks within that department solely.
Job Responsibilities – A CFO has greater responsibilities and demands since they are the main financial strategist. They can make organization wide decisions and have hands-on investments. While a controller handles the minor and major details of accounting and day-to-day processes.
Daily Tasks – Day-to-day tasks for a CFO are overall business strategy, reporting and organization wide operations. Controllers manage reporting and bookkeeping within one department.
Divisions – The three divisions that typically report to a CFO are controller, treasure, and tax manager. The four that typically report to a Controller are accounting manager, financial planning manager, accounts receivable manager, and accounts payable manager.
If you believe your organization is ready for either a CFO or Controller, the time to act is now. Waiting too long to bring in one of these valuable players on your team can be detrimental to an organization and the bottom line. Chief Financial Officers and Controllers are critical in bringing accuracy, best practices and maintaining growth to all financial aspects of a business.
If you are interested in bringing in a CFO and Controller into your business (full-time or part-time) contact CFO Systems Search & Staffing today to help, bring your organization and financial decisions to the next level.