THE DIFFERENCE BETWEEN A CFO AND A CONTROLLER

If you’re comparing the role of a controller to the role of a CFO, you are not alone. The differences lie in the fact that a controller’s responsibilities are mainly technical and tied to historical data, while a CFO’s responsibilities are mainly functional and related to the company’s future endeavors. A controller’s job is more accounting-related, and he or she deals with overseeing processes while the CFO is the CEO’s right-hand man and makes forecasts and strategic decisions based on data and reports supplied by the finance and accounting functions.

Responsibilities of a Controller

     A controller is in charge of the accounting department and/or outsourced accounting activities depending on the company’s setup. If you have an in-house accounting department, the controller is in charge of hiring and managing the accounting team.

     The controller ensures day-to-day accounting processes are running well such as:

·       cash flow maintenance,

·       payroll,

·       collections,

·       accounts payable & receivable,

·       monthly and yearly closings.

The controller will also:

·       provide data for the budgeting process,

·       implement policies to ensure solvency,

·       works to improve reporting and efficiency,

·       help ensure legal compliance when it comes to the company’s financial activities,

·       compiles and reviews historical data and reports the company's historical performance,

·       will work to improve processes and efficiency where necessary to help meet the company’s financial goals, and

·       he or she then passes on this data to the CFO who uses the data to build financial models that provide visibility into how the company is projected to perform in the future. 

Additional responsibilities of a controller can include:

·       management of information technologies,

·       insurance,

·       sales tax reporting,

·       federal income tax reporting,

·       outside CPA audits, and

·       human resources.

Controllers are in essence responsible for the financial and regulatory compliance of a company.  Think of the controller as the "historian" for your company.

Responsibilities of a CFO
A CFO’s responsibilities primarily involve risk management and strategy, as well as being ultimately responsible for the financials of the company. The CFO:

·       collects and analyzes reports from the controller and answers to the CEO,

·       should have the insight to present new opportunities based on financial data and industry trends to the CEO, executives, and the board,

·       also captures new ideas and strategies from the CEO or other senior managers and builds financial models to advise on the best course of action,

·       develops, improves, and utilizes forecasting tools to provide the CEO and senior staff with the best possible financial insight for corporate initiatives,

·       ensures that important business decisions are taken under financially sound principles,

·       maintains relationships with investors and banks and prepares documents needed to obtain capital from investors.

Other CFO responsibilities include:

·       searching for insurance policies and employee benefits and interacting with vendors to ensure the company is getting the best possible deals and

·       using his or her financial expertise primarily for looking forward strategically to identify risks and opportunities for the company. A CFO should have knowledge of the company’s industry and understand how the company works from a holistic perspective.

     

The BEST Solution for Your Business

In some smaller companies, the role of a CFO and a controller may be undertaken by one person. As a business grows, the need for two high-level finance executives becomes more apparent and necessary to maintain business growth and support the operations of a larger firm.  

However, if your company can't afford a controller and definitely not a CFO, O'Hara Business Strategies can function as a Contract Controller or CFO to provide cost-effective, savvy financial expertise and a strategic approach. 

Or, perhaps you need a temporary controller / CFO while hiring a new one or you're looking for some objective consulting advice about the best option for your company, call O'Hara Business Strategies!