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Controller vs CFO: 3 Key Differences

The CFO’s and controller’s roles are closely adjacent to each other. In many businesses that have grown quickly, these roles may be poorly delineated. Controllers can be found tasked with doing the forward-facing strategic work of a CFO, and CFOs can be saddled with the day-to-day operational accounting oversight work of a Controller. Though the CFO and the Controller work closely together, they have significantly different roles and responsibilities within a company. In this article, we outline key differences such as strategic versus tactical, executive versus director, and we take a look at the tasks and responsibilities that come with each.

CFO vs Controller: Strategic vs. Tactical

The CFO is the strategic financial leader, pushing an organization forward and advising key stakeholders about important business decisions.

The controller ensures that the day-to-day operational functions of the accounting department are being accomplished to the highest standards.

When a CFO and controller are at their best, they are working in tandem, supported by staff accountants and rigorous finance and accounting processes.

Strategic planning is at the core of the Chief Financial Officer’s role in a business. A CFO is able to look at the historical and operational data, identify potential upcoming risks to the business, and make appropriate decisions to mitigate those risks. Once the CFO has identified potential threats, it is the role of the controller to implement tactics to prepare for those eventualities by strengthening the company’s accounting processes and procedures.

How CFOs Support CEOs:

CFOs are often the financial and data insights engine supporting CEOs’ ideas.  By presenting data to support the newest initiatives, together, CFOs and CEOs can make a compelling case for new directions and ideas to move the business forward.

CFOs develop efficient and effective strategies to increase profit margins, employee productivity, and cost savings, measuring results against the company’s goals and, finally, reporting the data back to the C-Suite.

With a strong relationship between CEO, CFO, controller, and accounting staff, there can be company-wide accountability, productivity and profitability.

Read More: The benefits of CFO-level business guidance.

Daily Responsibilities of a Controller:

Although both CFO and controller roles oversee the financial aspects of the company, they have very different day-to-day responsibilities. Here’s a look at the difference between the two:

A controller has four tiers of accountability, each with its own set of responsibilities. These include:

Management

  • Implementing and maintaining accounting procedures, processes, and policies
  • Supervising all accounting department operations
  • Overseeing control of accounting within subsidiary companies

Transactions

  • Maintaining an up-to-date data storage system
  • Ensuring accounts payable and receivable are on time
  • Ensuring payroll is on time
  • Supervising bank reconciliations
  • Keeping an updated chart of accounts

Reporting

  • Preparing relevant and timely financial reports
  • Preparing the company’s annual budget and annual report
  • Suggesting ways to improve company performance
  • Generating and reporting financial operating metrics
  • Reporting budget variances to management
  • Generating financial analysis for management decisions

Compliance

  • Monitoring debts and compliance
  • Providing information to external auditors
  • Providing financial information for tax filing

The Daily Responsibilities of a CFO

A CFO is less directly involved in the financial department’s day-to-day operations than the controller. The two tiers of accountability that a CFO has are:

Financial Strategy and Forecasting

  • Reviewing and comparing the company’s past and present financial data
  • Generating forecasts for the company’s financial future
  • Reporting on where the company is most financially efficient and where improvements can be made
  • Predicting future scenarios and analyzing the best direction for the company’s success

Treasury Responsibilities

  • Deciding the best ways for the company to invest money
  • Analyzing and overseeing the company’s capital structure
  • Determining the best options regarding debt and equity

Read More: What Should Small and Mid-size Businesses Expect From Their CFO?

Hierarchy: Director vs. Executive

The accounting department may be missing critical opportunities if there is no one in the role of the controller. Not only that, but the CFO may be working overtime to get all the information they need to make accurate decisions. Likewise, without a CFO, the larger fiscal picture may get lost, and the company may not have an accurate forecast of future financial health and growth opportunities.

The combined efforts of the CFO and the controller can help your company realize your CEO’s vision.

Does Your Company Need a Controller or a CFO?

If you’re struggling to decide whether your company needs a controller, a CFO, or both, here are some things to consider:

Controller


You may consider hiring a controller if:

  • Your company is growing rapidly, and you require accounting records based on Generally Accepted Accounting Principles (GAAP)
  • Your accountant can’t keep up with all the financial data
  • You need to develop a budget and cash flow forecast
  • You need financial management reporting

CFO


You may want to consider hiring a CFO if:

  • You need more than just accounting records
  • You’re in a transition stage, such as going through a merger, acquisition, or industry-shift
  • You need financial forecasts for your company
  • You need someone to help you make decisions on investments

Outsourcing your business’s accounting and financial advisory roles: 

At Signature Analytics, we can work with your existing team to lead or support with controller guidance, accounting, and transactional support or CFO-level business advisory services. 

Outsourcing allows businesses to gain insight, structure, and improved processes at a scalable rate. Contact Signature Analytics today to find out how we can help you optimize your company’s financial future.