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Controller vs CFO: 3 Key Differences

Though the CFO and the financial controller work closely together, they have significantly different roles within a company. The biggest distinctions can best be described by breaking down the operations and responsibilities that come with each role. Another important aspect is the ongoing relationship between a controller and CFO, which is what leads to their success.

1. Scope of Roles: Strategy vs. Tactic

The CFO plays a significant role in strategizing for the company’s future, pushing the organization forward, and advising stakeholders about important business decisions. The controller, on the other hand, tends to carry out tactics that help with the day-to-day financial operations of the accounting department. These tactics enable the CFO to meet the company’s strategic goals.

The strategic planning of a Chief Financial Officer is often illustrated by their ability to identify business risks and make appropriate decisions to mitigate those risks. Meanwhile, the controller implements their tactics to strengthen the company’s accounting procedures.

The CFO’s strategizing is significant because it is their responsibility to help the CEO convince executive management of new ideas. Once those new ideas have been communicated to employees, they begin measuring results against the company’s goals. It is the CFO’s strategic leadership that steers the company in the right financial direction while creating greater company-wide accountability.

The controller, however, looks for ways to improve the company’s profitability and primarily reviews the company expenses. A good financial controller will develop efficient and effective strategies to increase profit margins, increase employee productivity, and find cost savings.

Read More: Benefits of a Part-Time CFO.

2. Daily Responsibilities: Management vs. Forecasting

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

What are the Daily Responsibilities of a Controller?

A financial 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

What are the Daily Responsibilities of a CFO?

A financial 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

What are the Daily Responsibilities of a CFO?

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

Economic Strategy and Forecasting

  • Reviewing and comparing the company’s past and present financial situation
  • 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
  • Overseeing the company’s capital structure
  • Determining the best options regarding debt and equity
  • Analyzing issues related to the company’s capital structure

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

3. Hierarchy: Director vs. Executive

The accounting department may be missing critical opportunities if there is no one in the role of 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 is at stake and the company may not have an accurate forecast of future finances.

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

Read More: Signs Your Company Needs to Hire a CFO

Does Your Company Need a Controller or a CFO?

If you’re struggling to decide on whether your company needs a financial 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 relocation
  • You need financial forecasts for your company
  • You need someone to help you make decisions on investments

Outsourcing: For companies who don’t have enough work or enough money for a full-time, in-house CFO or controller, outsourcing is the way to go. Companies like Signature Analytics can provide you with top-notch financial professionals who can help you make the most of your company’s current and future finances. Outsourcing these roles has several advantages:

  • You get high-quality professionals without having to go through the whole advertising and hiring process
  • You only pay for the work that’s being done for your company
  • You save on salary, benefits, bonuses, and raises
  • You have the ultimate flexibility to scale up or down depending on your needs

You can feel confident that the professionals you outsource are experienced as they are vetted by Signature Analytics.

If you have a small or medium-sized business and think it could benefit from a CFO or controller, please reach out to our team of experts. Even if the company doesn’t have the financial resources to bring these positions in-house, you can outsource these roles. Contact Signature Analyticstoday to find out how we can help you optimize your company’s financial future.

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