Controller vs. CFO – Key Differences in Roles
When hiring a finance team, a pivotal decision is choosing an experienced CFO or controller to manage financial responsibilities. While these roles overlap in some areas, they differ in scope and focus. This guide highlights the distinctions between controllers and CFOs to help you make an informed choice for your organization.
What Is a Financial Controller?
A financial controller is an accounting expert whose education and training qualify them to be a firm’s lead accountant. They are usually responsible for managing the company’s accounts and overseeing the accounting department’s everyday activities, from bookkeeping and insurance to auditing and HR. Controllers have excellent attention to detail and are trustworthy enough to handle essential documentation and other responsibilities.
Though a controller is a senior financial professional, they often have a more limited focus. If your organization also employs a chief financial officer, the controller will report to that person. Otherwise, they’ll report to the CEO.
What Is a CFO?
A chief financial officer is the highest-ranking financial executive in a company. They are responsible for making strategic choices about things like investments, partnerships and mergers. Everything from significant budget decisions and forecasts that move the company forward falls under their purview.
Unlike the controller, who is responsible for the nitty-gritty details of accounting, the CFO’s responsibilities are more zoomed out and have a broad focus beyond finance and accounting. As a C-suite executive accountable for the company’s direction and vision, a CFO typically reports to the CEO or board of directors, depending on the leadership model.
Controller Responsibilities
As accounting experts, controllers oversee all aspects of financial records, ensuring accurate and timely bookkeeping. Here are some of this position’s duties.
- Managing and hiring for the accounting department
- Coordinating or advising in budgeting and forecasting
- Maintaining external financial reports, including SEC filings, financial statements and tax statements
- Overseeing accounting functions and recordkeeping
- Improving the efficiency of accounting operations
- Maintaining legal compliance regarding finance and tax regulations
- Spearheading companywide financial policies
- Processing payroll and approving invoices
- Performing financial analysis
- Implementing new accounting systems
- Managing external audits
CFO Responsibilities
CFOs take a comprehensive, big-picture approach. They manage capital structure and generally prepare the business by analyzing financial information. While CFOs can take on additional duties that sometimes overlap with what other executives do, here are some examples of what they are often responsible for.
- Overseeing finance department directors like the controller
- Managing financial and strategic business planning
- Updating and advising the C-suite and board of directors on financial matters
- Developing strategies for revenue growth, contingencies and other scenarios
- Forecasting analysis to improve cash flow
- Managing investments, depth agreements and other treasury activities
- Securing financing and coordinating treasury functions
- Managing investor relations and overseeing acquisition deals
- Restructuring the finance department to improve efficiency
- Reviewing internal controls and financial statements
CFO Training vs. Controller Training
A controller’s training path is technical and accounting-focused. They usually start with accounting or finance degrees and pair those with certifications such as certified public accountant or certified management accountant. Their roles in accounting, from entry level to senior levels, strengthen their mastery of financial systems, making them adept at financial audits, reporting, compliance and internal controls.
In contrast, CFOs typically begin their careers by earning finance, accounting or business degrees. They may go on to pursue advanced master’s programs that strengthen their skills in cross-departmental decision-making and long-term planning. CFOs are adept at forecasting, risk management and corporate finance leadership.
Can You Have Both a CFO and Controller?
Regardless of your business’s size, you can hire a CFO and a controller to perform different responsibilities. However, your organization may not need both roles yet. The decision hinges on factors such as company size, growth stage and financial complexity.
Businesses must generate accurate and timely financial records in line with generally accepted accounting principles. However, these day-to-day activities don’t necessarily require a CFO. A controller can streamline your finances if your company is growing rapidly but cannot yet justify the expense of hiring a full-time CFO.
You know you need a CFO if your business has reached a level where it requires strategic financial leadership beyond general recordkeeping. A CFO is crucial if you need a steady hand to shape organizational growth through bold investments, mergers and acquisitions, asset management and financial planning and analysis.
Can You Outsource CFO and Controller Roles?
That depends on your company’s goals, size and budget. Many small and midsized businesses outsource one or both roles via fractional CFO service and third-party accounting firms.
1. Outsourcing a CFO
Fractional CFOs serve as part-time, contract-based executives. Here are the benefits of outsourcing this position.
- Cost savings: You get access to executive expertise without the financial investment involved in hiring for a full-time role.
- Top-level strategy: Experienced CFOs bring strategic insight designed to help your business grow. In addition, you can adjust their involvement as you scale.
- External perspective: Bringing in an external CFO as a consultant exposes your business to knowledgeable and unbiased insight.
- Specialized expertise: You can enjoy specialized expertise with critical projects such as restructuring, mergers, acquisitions and fundraising.
2. Outsourcing a Controller
Companies of all sizes outsource their controller functions to accounting service providers who take over financial reporting, internal controls and compliance. Here are the benefits of outsourcing a controller.
- Reliable financial reporting: You can maintain accurate and timely financial reporting and save money on the cost of a full-time controller.
- Minimized errors: Having an expert accountant who understands standardized processes reduces errors and strengthens controls.
- Better compliance: You remain compliant with GAAP and audit requirements.
- Advanced technology: Specialized accounting firms stay abreast of tools and systems that streamline accounting operations.
3. Outsourcing Both Roles Simultaneously
Businesses that need a CFO and controller can outsource these roles to create a combined finance department. This arrangement has multiple benefits.
- End-to-end services: Comprehensive financial management from strategy and financial initiatives to day-to-day recordkeeping operations.
- Reduced cost: It’s cheaper to have a fractional CFO and an outsourced controller, especially if you’re running a startup and need reliable expertise that doesn’t strain your budget.
- Coordinated expertise: Since these two financial experts serve different functions, having both on the team streamlines the department.
Contact Marshall Jones for Financial Services
If you’re considering the differences between controllers and CFOs, understanding which professional your business needs is crucial to shaping its future. Marshall Jones is a full-service accounting firm that can help you fill either or both of these roles without hiring an in-house professional.
We are experts in a range of financial services designed to remove some responsibilities from your to-do list, freeing you to refocus your resources elsewhere. Contact our experts to discuss your needs.
