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Difference Between CFO and Controller

Posted by Early Growth

October 25, 2021 | 5-minute read (851 words)

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Controller Versus CFO: How Do These Roles Compare?

Accounting, financial reporting, and financial planning are the backbone of any successful business. Small companies often handle their own bookkeeping in the early stages. However, as organizations grow, they need a dedicated finance team with skilled and experienced staff to maintain momentum.

Controller and Chief Financial Officer (CFO) are two such roles. Yet, the difference between a controller and CFO is often unclear. This makes the decision of hiring a controller versus CFO challenging. Here’s a breakdown of everything you need to know about CFO and controller roles, the differences between them, and which might be a better fit for your business.

What is a CFO?

A CFO is responsible for managing all of a company’s financial actions, focusing on strategizing for future performance. Usually reporting directly to the CEO, CFOs make recommendations for improvements at the top level. They also spend most of their time with executive management and stakeholders.

Specific duties include:

Managing finance and accounting teams
Overseeing internal financial reporting
Reviewing and revising finance, HR, and IT processes
Tracking cash flow and investments
Forecasting and budgeting
Advising on long-term strategies, business goals, and financial planning techniques

What is a Controller?

The main difference when weighing up Controller versus CFO roles is the scope of involvement. Controller positions focus more on day-to-day finance and accounting procedures rather than overall strategy and planning. Essentially acting as a bursar for the organization, controller responsibilities may include:

Preparing balance sheets and income statements
Ensuring financial reports are complete and accurate
Overseeing payroll processes
Assisting with budget reporting
Compiling compliance audits
Tax reporting

Outside the for-profit sector, it’s not uncommon for controllers to be known as ‘Comptrollers.’ But there is no need for confusion. The job roles are the same.

The Difference Between CFOs and Controllers

While these controller/comptroller vs CFO job breakdowns help provide a clearer picture, responsibilities often overlap. However, that doesn’t mean the same person can do either job, as the primary goals of each role are distinctly different.

The key differentiation is that CFOs are financial planners, whereas controllers are financial reporters. A CFO is the chief accounting officer for the entire organization, dealing with high-level strategies to track growth and capital. Often involved in fundraising, investments, and risk mitigation, CFOs demonstrate strong leadership skills and are ultimately responsible for steering the company in the right direction.

Controllers play a treasury role, maintaining accurate accounts and record keeping. The job requires some financial analysis and reporting elements, but with the primary focus on strengthening compliance, procedures, and developing tactics. This helps increase productivity and profit margins from an internal perspective. Because of this, controllers need a thorough understanding of company accounting procedures and software.

Aside from these organizational factors, some intrinsic differences dictate whether a candidate is suitable for a chief accounting officer vs. controller role.

Work history – Automated workflows and IT processes negate the need for extensive knowledge in accounting to be a CFO. Controllers, on the other hand, do need accounting experience. As a result, most controllers come from accounting backgrounds, whereas many CFOs come from the finance and banking industries.
Personal attributes – Good CFOs are innovative, creative thinkers, whereas the best controllers are detail-oriented and meticulous.
Salary expectation – While both jobs are extensive, CFOs carry more overall responsibility and therefore command a higher salary.

CFO vs Controller: Who to Hire?

Now that we’ve established firm controller versus CFO definitions, it’s time to work out which to hire. If your business is growing beyond cash basis bookkeeping, you’ll need one or the other to bring you up to speed with Generally Accepted Accounting Principles (GAAP).

When to Hire a Controller vs CFO

When the strains of managing business accounts become too complex for your regular bookkeepers, it’s time to hire a controller. This is the best choice if you are looking for someone to take general ownership of your company’s accounting processes, encompassing:

Bookkeeper supervision
Increased CPA support
More accurate financial reporting
Streamlined closing and report delivery processes
Internal controls for errors, fraud, and security breaches

When to Hire a CFO vs Controller

Hiring a CFO is the better option if you need more than just accurate accounts and reporting, and you’re looking for a senior finance leader to take responsibility for:

Overall supervision of the accounting team
Guidance on financial strategy
Advanced reporting and analysis
Stakeholder reporting
Fundraising assistance

How Early Growth Can Help

Still need help making your controller versus CFO decision? When you partner with Early Growth, we’ll work with you to make sure you’re onboarding the right people. Our expert consultants provide all the tools and training your employees need. We can even help you develop a comprehensive guide for your business including policies, introductions, expectations, and onboarding guidance, all backed up by thorough, data-driven HR reports. In addition, we can aid you in finding outsourced CFOs for your business.

Contact us today to learn more and discover how we can help you adapt to meet the needs of your evolving business.

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