What Is the Difference Between a Controller and a Fractional CFO?

CFO v. Controller Image

Image credit: © macniak @ Envato Elements – Licensed – All Rights Reserved

What is the difference between a Chief Financial Officer (CFO) and Controller? Understanding each of these roles, expectations and responsibilities is critical when building your business. For instance, most people think a Chief Financial Officer (CFO) and Controller are the same, but in fact these two roles have very different expectations and responsibilities.

Before you make a decision on who to hire, it’s important to understand the difference between these two roles.

Controller Roles & Responsibilities

A controller’s role includes:
Implementing and supervising all accounting operations
Supervising payroll
Managing bank reconciliations and company budgets
Preparing financial reports

So, when do you need a controller?

It’s a good idea to bring a controller to your team if your company is expanding quickly. This rapid growth likely means you have reached the level where your business requires timely accounting records most likely in compliance with Generally Accepted Accounting Principles (GAAP).

At this point, you need more advanced accounting strategies than basic bookkeeping. As your company continues to grow, it’s worth maintaining the controller function because he or she will be an invaluable asset for reporting to the CEO and CFO.

A controller will be able to generate and interpret relevant financial data so you have a clear understanding of how and why business changes have occurred over time. The controller also works with the CFO to help you make decisions on efficient use of resources and capital.

CFO Roles & Responsibilities

A CFO’s role includes:
Predicting future scenarios and identifying risks
Finding areas where money can be saved
Sourcing the best investments for the company
Overseeing the company’s treasury responsibilities
Forecasting the company’s financial future

So, when do you need a CFO?

There will come a time when you need a better accounting strategy and plan for your company. You will need someone that can analyze your accounting records which are based on past actions and cash flow. At this point, you should consider hiring a CFO.

You will benefit from a CFO because they will be able to analyze your financial reports, benchmark against industry standards, and use this data to forecast the future revenue and cash flow that you will need to plan for growth in your company.
When you are making the transition from a small or medium-sized business to a large organization, you need a financial professional who has the experience of a CFO, preferably in your industry.

Whether you’re considering a Controller or a CFO (or both), hiring these important positions can be expensive and your company budget may not have the room for a full-time controller or CFO, which makes outsourced solutions a great option without having to worry about paying a full-time salary and the added costs of benefits and vacation time. This is where fractional positions come into play.

A Fractional CFO can provide the strategy and experience to help your company take the financial steps toward growth and success. A fractional Controller can fill the gaps and provide a higher level of reporting and understanding than a bookkeeper or accounting manager can. Both fractional positions can work with your current team to fill the gaps and make the accounting department stronger.

If your company is growing and needs help with its financial strategy for growth, the team at RBTK can help. Contact us at (858) 430-0300.