However, a CFO carries different responsibilities and must possess specific qualities that significantly differ from those of a controller. In conclusion, financial controllers play a vital role in managing a company’s finances. Whether it’s overseeing the accounting department, implementing financial controls, or producing regular reports, a good controller can help your business grow and succeed. If you’re unsure whether you need a full-time CFO or a part-time controller, consider your company’s needs and budget. With the right financial strategy and reporting in place, your business can thrive. A CFO is a trusted advisor who provides strategic business analysis and direction to the CEO, President, and other C-suite executives while running the organization’s financial team.
Understanding the key differences between a CFO and a Controller is essential for efficient financial management and decision-making. Compensation packages for controllers and CFOs may differ substantially based on the size of the company, the sector in which it operates, as well as their respective positions within the organization. While both positions require managing staff within their respective financial departments, CFOs typically receive higher compensation due to their strategic role in driving the company’s growth and development. A controller manages the functions and people for everyday bookkeeping and produces reliable and accurate financial statements for a specific period.
Controller Roles & Responsibilities
Understanding the differences between financial controllers and chief financial officers (CFOs) helps business owners ensure effective management within their finance teams. Understanding the difference between a financial controller and a chief financial officer (CFO) is crucial for businesses looking to grow. While both roles are essential, they have different responsibilities and focus areas. Controllers are responsible for ensuring compliance with GAAP, preparing accurate financial statements, and managing accounting departments.
- They know the numbers and are able to explain why they are how they are, even if they don’t perform the analysis themselves.
- There are five types of specializations where you will want a CFO with experience in that specialty.
- Before proceeding to the business’s hiring requirements of a controller vs a CFO, allow us to explain a bit about the duo and their job description or requirements for any business.
- The easiest place to start in a controller vs. CFO comparison is to give you a description of each role.
- 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.
Their decision-making abilities, attention to detail, and typical previous work experiences set them apart. In May 2018, 30% of financial managers (193,000 employees) worked in finance and insurance, while professional, scientific, and technical services employed 90,700 financial managers, 14% of the workforce. Management of companies and enterprises employed 69,900 (11%), the government employed 44,800 (7%), and manufacturing employed 42,100 (6%). The BLS expects the job market for financial managers to increase by 16% between 2018 and 2028, adding around 104,700 jobs during that span. At The CEO’s Right Hand, we provide strategic financial advice and tactical accounting support to clients across all industries.
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. Their skills are in management, making sure the accountants and bookkeepers who work under them are doing their jobs properly in a high-stakes environment. They then provide reports to executives who make the corresponding decisions. Controller salaries vary depending on experience, the size and location of the company, and the complexity of the industry.
Difference Between CFO and Controller
Controllers may be able to suggest ways to minimize debt, but they don’t understand business risks as much as CFOs do. CFOs have a tremendous understanding of both financial and non-financial risks as well as ideas to mitigate them. They’re able to see the big picture, lead the strategy, and make critical decisions. Both should be able to present useful and readily consumable reports containing graphs and charts. The best candidates for both positions will provide evidence of having positively influenced the CEO’s decision by defining, analyzing, and improving the key business performance metrics.
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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. Fully Accountable is an outsourced accounting firm specializing in eCommerce and digital businesses. Chris has served as a CPA, CFO and has over 14 years of experience in the accounting and finance industry.
DIFFERENCES IN UNDERSTANDING
But when those transactions become overwhelming, it’s time to add a full-time expert to the team. If your company is not already using data to drive decision making, it has an opportunity to be leveraged. Data-driven reporting is helpful for strategic logistical purposes, like when a company is faced with an unexpected supply chain problem or economic downturn.
Outsourced vs In-House Controller: Which is Right for Your Business?
This is a newer trend that I think has really taken hold within the industry. Big companies have all these resources to be able to help them grow and expand and get information. We love the benefits of an outsourced finance and accounting solution as it starts leveling the playing field for smaller companies.
Controllers typically have an auditing, cost control, or accounting background and an undergraduate degree in accounting or a related field. When you find yourself exploring the difference between a controller and a CFO, that’s a good thing! Your business is evolving, tackling complex challenges, and ready for financial leadership. Here are some situations https://personal-accounting.org/average-u-s-department-of-state-salary/ which often prompt small business owners to hire a CFO in addition to or instead of a controller. To give you a little more insight, here are some situations which prompt small business owners to hire a controller. From a CFO perspective, they’re typically commanding anywhere from $250,000 to $350,000 base salary in mid-market companies.
Comparing Controllers vs. CFOs within Finance Teams
Generally speaking, $1MM in annual revenue is a minimum threshold to bring in a part-time CFO or contract CFO services, but some $500K businesses benefit as well. The common factor for those $500K companies is that they’re hungry to get and use financial insights. They are usually the ones who are putting the numbers together as you’re growing. You’re going to want to hire a controller whenever you decide outsourced finance and accounting solutions no longer make sense.
This is so that any incoming and outgoing transactions can occur smoothly for the business. Read more to decide whether you need a CFO, a controller, or both to run a successful financial strategy to scale your business. This is largely due to the number of similarities found in both roles and that many businesses use the two words interchangeably. Make solid data-backed decisions, reduce costs and achieve consistent growth. A company may need to hire both a controller and a CFO in the business if the scale of the business is big and the demand of the industry. Another one of the reasons that you need to hire a CFO is when the business requires you to take some thought financial decisions that the owners and members do not have enough knowledge about the same.