Hiring the right controller will be a great step forward to better understand your finances. Both CFO and controller can be an unstoppable feat in improving the financial management of your company. However, some business owners or leaders may not have the financial mindset to guide them in the right direction.
Controllers are executive-level accountants who manage the day-to-day tracking and reporting of your financial activities. The Chief Financial Officer (CFO), on the other hand, analyzes your financial and operational performance from the context of your business goals. Then they use that information to provide strategic insights to guide your business decisions. Both roles are important, but controllers must focus on today’s details, while CFOs plan for the future. The controller carries out the implementation and day-to-day management of the operations of the accounting department. The controller’s oversight and account management enable the CFO to meet the company’s strategic goals.
The controller then translates that vision into day-to-day managerial action. Financial controllers are responsible for the day-to-day management of the finance department and may also be involved in strategic planning, forecasting, and budgeting. They ensure that the organization’s financial statements are accurate and comply with applicable laws and regulations. The chief financial officer (CFO) is a company’s most senior finance employee, and is ultimately responsible for everything related to the company’s finances.
What to Know About a Chief Financial Officer
We’re collaborative, explaining what the numbers mean, rather than just emailing reports. 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.
- As an experienced entrepreneur himself, he has served in various C-suite leadership and advisory roles across a wide spectrum of industries.
- However, since a single person cannot manage everything, there are further subdivisions within the finance department.
- Addressing the issues surrounding capital structure is one of the most important duties of a CFO.
- The CFO is traditionally ranked just below the CEO in terms of hierarchy.
At Driven Insights, we have clients who take advantage of Controller and/or CFO services depending on their specific needs. The easiest place to start in a controller vs. CFO comparison is to give you a description of each role. Close the books 4x faster, collect over 95% of receipts on time, and get 100% visibility over company spending. They may also have a Certified Management Accountant (CMA) certification along with their Certified in Strategy and Competitive Analysis (CSCA) certificate. But there are plenty of ways to differentiate between the two roles, so let’s address them one by one. The CFO is an executive, working in the c-suite along with the CEO, COO, or any other executive-level employees.
Controller vs CFO: Which Does My Business Need?
They use the reports the controllers and accountants generate to inform their plans, which might influence actions such as investing in a new project or determine their company’s future. A financial controller is a mid-level manager in your financial department. They oversee all accounting functions and activities within an organization. Most midsize companies start hiring a CFO when they begin earning more than $50 million in annual revenue. Smaller companies might also hire part-time or virtual CFO to save costs. If you’re looking to extend your runaway and aim for the next funding round, a CFO can help.
- Likewise, without a CFO, the larger fiscal picture may be neglected, and the company may not have an accurate forecast of future finances.
- Occasionally a Controller will receive additional training and transition into a CFO role, but that’s not necessarily the natural next step.
- Both controllers and startup CFOs have experience in the world of finance and/or accounting, and have a strong impact on their company’s bottom line.
There are many reasons small business owners consider beefing up their finance team. Whatever your reasons, we’re glad you’re thinking about it, because, from our experience, most owners wait too long to get help. If your business is still in Cfo vs controller the startup phase, it may not be generating enough income to justify the expense of hiring a CFO. However, if you’re seeing steady growth and your revenue is starting to plateau, bringing on a CFO can help you take things to the next level.
The financial controller position is typically found in larger organizations and reports directly to the CFO. For many small companies, a bookkeeper will do the job, but what if your company outgrows the scope of bookkeeping and needs a dedicated person to manage the finances? That’s where the roles of Chief Financial Officers (CFOs) or Finance Controllers come into play. The cost and commitment of a full-time CFO may be too much for smaller organizations. Fractional CFOs perform all the same functions as full-time CFOs and can help you solve specific financial problems on a part-time basis. This means business owners can get a long-term partner who can provide the advice they need at a “fraction” of the cost.
Hiring a controller will also be imperative if your business needs to follow GAAP compliance. Not having a controller will expose your business to a lot of risks, such as fraud. A controller will monitor day-to-day bookkeeping as well as manage internal controls and external audits. Aside from that, their scope of work involves accounts payable, accounts receivable, taxation, insurance, and HR, among others.
Skills required
They should be able to identify financial risks and implement plans to shelter the company from them. In a business, the chief financial officer (CFO) and controller work closely together. Accountants and other financial professionals who aspire to fill a managerial role and become a controller or CFO can benefit from a graduate degree that takes their skills and business sense to another level. Whether you’re interested in diving into the details of a business’s financial state or focusing on high-level decisions, the right education can help propel your career forward. Explore how Maryville University’s online Master of Science in Accounting could be perfect for you. Most companies bring in a financial controller when they need to generate accurate, timely financial statements that comply with GAAP.
A virtual CFO can replace at least one full-time employee with additional savings in the finance department of up to 30%. See our outsourced accounting pricing tiers to learn more about our base packages starting at $500 per month. They take control of the day-to-day accounting operations, maintaining the highest level of accuracy and transparency across all books, accounts, and records. This is so that any incoming and outgoing transactions can occur smoothly for the business. Small businesses making less than a million in profits may work well with an accounting manager to generate income statements, track bank accounts, and attend to other bookkeeping responsibilities. As stated before, because the CFO vs Controller has more responsibilities assigned to the job, the pay is also better as well.
You’re welcome to bookmark this page or download the chart for future reference. Get the peace of mind that comes from partnering with our experienced finance team. In addition to delivering on-time, accurate books, Pilot offers CFO and Controller services to help young companies grow. We’ll break down both roles’ responsibilities, how they work together, and how to know what your business needs. Up to a certain point you can likely get away with purely outsourced accountants.
The CFO’s primary responsibilities include developing and implementing financial strategies, overseeing financial planning and reporting, and managing the company’s investment activities. The CFO is also typically responsible for managing the company’s treasury function, overseeing tax compliance and risk management. The primary difference between a controller and a CFO is the area of focus.
Controller vs CFO: Key Takeaways
For financial controllers, median annual salaries range from $90,000 to $110,000, according to several studies. As with CFOs, bonuses, stock options and other non-cash incentives are variable and increase overall compensation. As a general rule of thumb, most companies hire their first financial controller when annual revenue exceeds $5 million. That broad view of the business means only a small fraction of CFOs are focused solely on dollars and cents. The vast majority juggle responsibilities beyond finance and accounting, such as identifying strategic partnerships, evaluating technology and representing the company in public forums.
They’re always scanning the horizon to identify potential threats and opportunities in order to develop their recommendations and action plans for the future. Focused on future strategy, not just historic numbers, we help small to mid-sized businesses and startups reduce financial risk and grow. You get access to our consistent team of experts — priced by the hour, so you only pay for what you need.
The bottom 10% in the profession earned around $68,360, and the top 10% more than $208,000 annually. CFOs’ salaries may be affected by their experience and education level, as well as their geographic location and the industry in which they work. Manufacturing and professional, scientific, and technical services paid their chief executives a median annual salary of more than $208,000. Healthcare and social assistance paid $174,000, and government paid $110,000. Bottom line, financial controllers and CFOs enjoy a symbiotic relationship. The two jobs have many similarities, and in small companies these roles are often combined.
As part of the C-level leadership board, they act as the primary advisor of the CEO in developing financial strategies to guide the company in reaching business objectives. Instead of getting bogged down in financial statements and spinning your wheels, look to the future of your expansion by choosing a CFO vs controller. Companies hire CFOs and controllers for many reasons beyond a grand design. Some of these needs may be short-term; that’s when working with a fractional CFO or interim CFO who can oversee particular financial functions or tasks may be the best option. Controllers typically report directly to the CFO (except in cases where there is a COA) and usually lead a team of accountants, bookkeepers, and accounts receivable/payable clerks.
The CFO reviews financial reports, manages risks, and targets future growth. Some day-to-day activities of the CFO include financial analysis, forecasting, finalizing financing, fund management, planning, implementing, strategizing, and coaching the rest of the finance team. CFOs, as data-driven decision-makers, manage and work with the financial divisions to ensure that the reports are delivered on time. By analyzing cash flow and financial statements, they can identify strengths and weaknesses to propose an action plan for future growth. Vacations and time off will not leave your company high and dry when you rely on internal controls.
Main tasks of financial controllers
An outsourced controller will have experience in a wider range of industries providing innovative solutions to old problems. In-house controllers may not see the forest for the tree, missing opportunities to cut costs or amend business practices that may not be optimal. You may agree that it’s easy to see how one person could fill both roles simultaneously, at least when your company is still new. With so much overlap in the roles and responsibilities, the difference between a CFO vs controller seems negligible at first. You don’t want to wait until your business is facing a financial challenge to hire a CFO.