CFO vs Controller: Key Differences & When to Hire Each

Without a Controller, financial reporting could be messy and unreliable.Without a CFO, a company might lack vision and strategic growth. While the Controller looks backward at past performance, the CFO looks forward, shaping the company’s financial future. The CFO works closely with the CEO and board to drive growth, secure funding, and optimize profitability. Most importantly, they must learn to adopt a forward-looking mentality, which is key to the strategic responsibilities of a CFO.

• Their positions on the org chart aren’t the only difference between CFOs and controllers.
• According to the 2021 Financial Hiring Guide by Robert Half, 71% of CFOs and senior financial executives view strong financial controls as essential for effective strategic decision-making.
• More transaction volume, and different kinds of transactions, requires more oversight.
• An outsourced individual or an in-house hire would be an experienced controller who would report financial results for your accounting department.
• Let’s compare what to consider when hiring either of these positions and how a CFO or a controller can help your business.
• The CFO collaborates with your board of directors, providing insights into financial performance and future projections, and simply sets the face of the company.

Tips for hiring a controller:

Financial controllers earn competitive salaries, typically aligned with their operational expertise and the level of responsibility they hold within the accounting department. Financial controllers excel in analytical and problem-solving skills, often working under tight deadlines to deliver accurate financial reports and ensure compliance. Their expertise includes proficiency in accounting systems such as ERP or AP automation software, a strong understanding of regulatory standards, and the ability to resolve discrepancies efficiently. CFOs and financial controllers may have overlapping responsibilities within a company, but they each have specific roles that differ from one another. This can be confusing for business owners who are trying to figure out which position they need to fill. Controllers are responsible for managing their organization’s accounting departments, tracking relevant financial data, and producing important financial reports.

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• However, as a company grows and its financial operations become more complex, the need for a CFO and a controller becomes more pronounced.
• When FCs become CFOs, they assume control of the financial strategizing and positioning as well, making them a holistic controller of everything finance.
• Having a controller run the accounting department may make more sense based on the size of your business, the volume of work, and the budget.
• Understanding the roles of CFO and Controller can significantly benefit a business owner by providing insights into managing the company’s financial health and strategic direction.
• The Chief Financial Officer (CFO) focuses on the overall financial strategy and health of the organization.

Required skills

They must also have strong organizational and analytical skills to manage the financial operations of the company effectively. The Chief Financial Officer (CFO) is responsible for the overall financial health of an organization. They oversee financial planning, budgeting, and reporting, and are responsible for ensuring compliance with accounting standards and regulations.

steps for finance leaders to create an effective annual plan

CFOs build on these competencies by adding exceptional communication and leadership skills to their repertoire. They must articulate complex financial concepts to stakeholders, inspire their teams, and collaborate effectively with other executives. This blend of technical expertise and interpersonal ability enables CFOs to influence and drive the https://www.bookstime.com/ company’s success at the highest levels. Additionally, the CFO reports to the CEO and is part of the organization’s senior-level/executive team. A controller or comptroller oversees the finance department and reports to the CFO. Instead of bringing on a CFO, an organization will elevate a controller to the position of chief financial controller.

Using annual revenue as a guide, let’s break down what type of financial leaders different size companies tend to use. This isn’t an exact science, as not all companies of certain sizes will have the same complexity or approach to their financial operations. While both roles exist to help their companies grow, there are many things that set CFOs apart from controllers.

From QuickBooks to Financial Strategy: How to Scale Your Finance Function

• The responsibilities of a CFO are diverse and often strategic in nature, but typically revolve around financial planning, investments, and driving business growth.
• A fractional CFO frequently collaborates with the CEO, board members, and external investors, providing strategic financial insights and participating in high-level decision-making.
• While there can be some grey area between a controller and CFO, a controller’s primary role is to ensure that the company’s financial reporting and accounting are accurate.
• In contrast, the CFO focuses on forecasting, using historical data to predict future trends and prepare for potential market shifts.
• A controller has four tiers of accountability, each with its own responsibilities.
• The Controller is responsible for providing financial analysis and reporting to the CFO, who then uses this information to make strategic decisions.

The CFO is an executive who works to protect the overall financial health of a company. But if someone is focused on being up to date on the thousands of tax laws out there, are they able to forecast cash flow, do a cost-benefit analysis for an acquisition, or handle a refinance? At the same time, most CFO’s aren’t up to speed on depreciation rules or state by state filing requirements; the CPA is. A Certified Public Accountant (CPA) has, among other requirements, taken and passed the Uniform CPA Examination given by the American Institute of Certified Public Accountants. However, it is common for CPAs to serve businesses as external independent consultants, supporting with financial audit services and preparing and filing cfo vs controller business taxes.

We specialize in serving companies in the real estate, construction, manufacturing, oil & gas, and professional services industries. Since these numbers can vary widely, it’s important to weigh multiple factors in a business when thinking about hiring a CFO. These factors can include the rate of growth the business is experiencing, the number of employees, and the current and anticipated financial complexity of the Payroll Taxes business.