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. There are always additional roles and responsibilities that are industry-specific. The list above should give you a good understanding of what the roles and responsibilities are at large. Controllers spend most of their time in the trenches making sure ledgers are accurate and systems are working properly.
Controllers are accounting experts and should maintain adherence to the most recent Generally Accepted Accounting Principles (GAAP) and all relevant taxation regulations. This is a technical position that requires vigilance, attention to detail, and precision. The precise differences between certain finance roles can be nuanced and hard to follow. CFO vs VP of Finance, and even Finance Director, can take some unpacking. Most important, because CFOs are the only other corporate executive with a companywide focus, they are primary advisers to their CEOs.
Financial Controllers, CFOs and Technology
The Chief Financial Officer (CFO) is your executive-level staff, often reporting directly to the CEO. The CFO position performs strategic analyses and is responsible for planning your financial future. Both monitor internal controls and analyze accounting records, but a CFO wants to interpret those balance sheets in terms of a business’s overall financial health. This is necessary to ensure accuracy and compliance with complex accounting rules and government regulations. The CFO’s job is to connect the dots between the company’s current financial situation, their prospects for the future, and to act as an advocate for financially sound decision making. In short, “yes,” a controller can become a CFO, but it’s not necessarily the logical next step in their career.
- Therefore, controllers typically earn higher salaries than their counterparts in the public sector.
- For example, project-based businesses like general contractors might have a controller support the purchasing process to keep expenses in line and establish reporting to enable job/project profitability monitoring.
- A CFO and a controller are on different levels within a company’s organizational hierarchy (or on its org chart).
- As you grow, however, they will need help and will assume the responsibility of hiring a team and leading the accounting department.
A controller is a senior level accounting position that attracts those with auditing, cost control, or accounting backgrounds. Occasionally a Controller will receive additional training and transition into a CFO role, but that’s not necessarily the natural next step. A full-time, fully burdened CFO salary will be around $300,000-$400,000 annually for small companies.
Controller vs CFO: roles, responsibilities, & profiles
According to salary.com, the median salary for a CFO in 2022 was reported to be $420,300 in the United States. A controller will be necessary if your business is handling a high number of transactions. In the wake of the COVID-19 pandemic and escalating tensions with China, American companies are actively seeking alternatives to mitigate their supply chain risks and reduce dependence on Chinese manufacturing. Nearshoring, the process of relocating operations closer to home, has emerged as an explosive opportunity for American and Mexican companies to collaborate like never before.
- Nearshoring, the process of relocating operations closer to home, has emerged as an explosive opportunity for American and Mexican companies to collaborate like never before.
- He also served as the President and CFO for Interactive Donor, a New York-based Benefit Corporation which incentivizes charity through rewards.
- The CFO or Chief Financial Officer is the senior executive responsible for managing the financial affairs of a company.
- Before taking your financial strategy in the wrong direction, consider the advantages of a CFO vs. controller and which would be a better fit for you.
However, differences in focus, execution and duties are apparent when the positions are distinct. Understanding the differences can be helpful when evaluating which professional best Cfo vs controller meets the needs of a company, or whether both might be necessary. Additionally, controllers manage and supervise the accounting and finance staff, and report to the CFO or CEO.
Virtual CFO: A Remote Finance Professional at Hand
No wonder the salary of a CFO vs Controller is often 45% to 50% higher. Given this background, a good controller will be well versed in the day-to-day requirements of running an accounting department. They will be detail-oriented and analytical, with strong math skills and extensive knowledge of general and industry-specific accounting standards and government regulations. Their skill set should include interpersonal and communication skills, good judgment, critical thinking, and management capabilities. You can expect proficiency in Microsoft Office products and relevant software, like QuickBooks and ERP solutions. Outsourced controllers are already trained in processes that save time.
Many companies offer outsourced controller services, including us here at Pilot. It’s worth noting that you don’t necessarily need a full-time, in-house CFO to handle these things. Companies who aren’t ready to hire a CFO can use outsourced CFO services to gain access to senior financial expertise, without the large expense of hiring a corporate officer. If a business has both finance roles, the controller will typically consult with the CFO to help ensure that various initiatives are compliant with tax regulations and accounting standards. The Financial Controller is more commonly thought of as the chief accountant. They’re directly responsible for closing the books on time, keeping clean financial records, and usually managing company cash flow.
Is a CFO necessary if my company has a comptroller or controller?
Chief accounting officers (CAOs) and financial controllers are both accounting experts who report to the chief financial officer (CFO)—but these two roles have subtle, nuanced differences. The controller oversees day-to-day accounting operations whereas the CAO is focused on tasks, such as corporate governance, risk management, and investor relations. The skill sets of chief accounting officers and controllers are complementary, as both ultimately work in tandem to support the CFO. A chief financial officer (CFO) is the senior executive responsible for managing the financial actions of a company. The CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions. A financial controller is a senior-level executive who acts as the head of accounting, and oversees the preparation of financial reports, such as balance sheets and income statements.
When to Hire a CFO
CFO stands for Chief Finance Officer and is a high-ranking executive in a company, typically reporting directly to the CEO. This technical role can include managing accounts receivable, conducting operations oversight analysis, and creating and monitoring internal controls. Your company will typically want to consider moving from part-time or outsourced CFO services to an in-house CFO at around $50MM in annual revenue. Some investor-backed companies, such as Software as a Service (SaaS) businesses, have more sophisticated needs than other companies with the same annual revenue. That sophistication means the business may need contract CFO services at $500K, rather than $1MM, and could hire a full-time CFO at around $35MM, rather than $50MM.
A controller is a tactical position responsible for compliance and reporting, whereas a CFO is a strategic leader responsible for all financial tasks including forecasting, planning and analysis. Controllers often do not make good CFOs, as they lack the out-of-the-box thinking required to innovate financial strategy; whereas CFOs often lack the discipline and rigor required to be a good controller. A controller is a company executive that is responsible for all the organization’s accounting activities.
Your business is evolving, tackling complex challenges, and ready for financial leadership. Before we dive in, however, allow me to give you the 30-second answer. We provide outsourced accounting services to clients in the western region and beyond. The CFO is traditionally ranked just below the CEO in terms of hierarchy. The controller reports to the CFO, sometimes alongside the treasurer and tax manager.
Together with the team, they handle internal audits and prepare recurring or monthly finance reports such as income statements and balance sheets. If a controller deals in the daily minutiae, then a CFO is all about the big picture. This strategic leader works with financial reports but is more interested in analyzing financial data and growing a company’s profitability.
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. Financial controllers also develop and implement policies and procedures to safeguard the organization’s assets and minimize risk. They often work closely with auditors to ensure that the organization’s financial statements are free of material misstatements.
They both help keep businesses on the positive side of the ledger, or at least manage their debt if they’re operating in the red in the short term. These professionals need to understand the bigger picture in their business environments and how current finances will change in the future. Each benefits from an educational background in accounting, such as Maryville University’s online Master of Science in Accounting, which includes courses in managerial accounting, auditing, and financial reporting. Of that group, 263,200 were classified as “chief executives,” which includes CFOs and other C-suite executives. The median annual salary for chief executives was $189,600 as of May 2018.