Though the chief financial officer (CFO) and the controller work closely together, they have significantly different roles within a company. The most significant distinctions can best be described by breaking down the operations and responsibilities of each role.

There are three key differences between a CFO and a controller, including the scope of roles, daily responsibilities, and hierarchy.

Scope of roles

CFO

The CFO is the finance leader and strategist for a company. They play a significant role in guiding the direction of a company’s future and advising stakeholders on important business decisions. CFOs identify business risks by looking at financial data and making appropriate decisions to mitigate them, among their many leadership functions.

Using vision and data, the CFO collaborates with the CEO to get company-wide buy-in for changes and new ideas. The CFO’s strategic leadership steers the company in the right financial direction while ensuring employees are held accountable for the implementation and execution of the new direction.

Controller

The controller carries out the implementation and day-to-day management of the operations of the accounting department. Their work can be referred to as controller services. The controller’s oversight and account management enable the CFO to meet the company’s larger strategic goals.

A controller will develop efficient and effective strategies to increase profit margins, increase employee productivity, and find cost savings through cash management.

They are among the most influential people in a company’s accounting and finance department. A controller can benefit a company by providing a balance of financial experience and accounting services management, bridging the communication between the C-suite and the day-to-day operations of the accounting department.

Daily responsibilities

Although both CFO and controller roles oversee the financial aspects of the company, they have very different day-to-day responsibilities. Here’s a look at the difference between the two:

CFO

A CFO is less directly involved in the accounting department’s day-to-day accounting operations compared to the controller. A CFO's tiers of accountability are economic strategy and forecasting, and treasury responsibilities.

Economic strategy and forecasting

• Reviewing and comparing the company’s past and present financial situation to improve financial strategy.
• Generating forecasts for the company’s financial future.
• Reporting on where the company is most financially efficient and where improvements can be made.
• Predicting future scenarios and analyzing the best direction for the company’s success.

Treasury responsibilities

• Deciding the best ways for the company to invest money.
• Overseeing the company’s capital structure.
• Determining the best options regarding debt and equity.
• Analyzing issues related to the company’s capital structure.

Controller

A controller has four tiers of accountability, each with its own responsibilities. These include management, transactions, reporting, and compliance.

Management

• Implementing and maintaining accounting procedures, processes, and policies.
• Supervising all accounting department operations.
• Overseeing control of accounting within subsidiary companies.
• Ensuring the integrity of all accounting functions.
• Providing job training and mentoring to the accounting department.

Transactions

• Maintaining an up-to-date data storage system.
• Ensuring accounts payable, accounts receivable, and payroll are on time.
• Supervising bank reconciliations.
• Keeping an updated chart of accounts.

Reporting

• Preparing relevant and timely financial reports.
• Developing the company’s annual budget and annual report.
• Suggesting ways to improve company performance.
• Generating and reporting financial operating metrics.
• Reporting budget variances to management.
• Conducting analysis for financial management decisions.

Compliance

• Monitoring debts and compliance.
• Providing information to external auditors.
• Producing financial information for tax filing.
• Facilitating tax information to the company’s CPA.
• Sharing financial information with company executives.
• Assisting the finance team with financial decisions.
• Helping the accounting team with cash flow management.

Hierarchy

The accounting department may miss critical opportunities if no one is in the controller role. Also, the CFO may be working overtime to get all the information they need to make accurate decisions.

Likewise, without a CFO, the larger fiscal picture may be neglected, and the company may not have an accurate forecast of future finances.

The CFO is traditionally ranked just below the CEO in terms of hierarchy. The controller reports to the CFO, sometimes alongside a treasurer and tax manager.

In the hierarchy, below the controller are roles such as accounting manager, financial planning manager, accounts receivable manager, and accounts payable manager.

Does your company need a CFO or a controller?

Are you struggling to decide whether your company needs a CFO, a controller, or both? Let’s compare what to consider when hiring either of these positions and how a CFO or a controller can help your business.

CFO

You may want to consider hiring a CFO if:

• Your business is in a transition stage, such as going through a merger, acquisition, or relocation: It’s never easy going through a significant change without financial knowledge in-house. A good CFO will keep your finances on track and provide high-level insight and executive leadership as your company transitions.
• You need financial forecasts for your business: All the financial data you track is wasted if you can’t use it proactively. A CFO can turn your historical data into projections so you can make insightful, data-driven business decisions.
• You’re overwhelmed: You have enough on your plate running the business every day. Plus, the added burden of guiding your finance department can quickly take over all of your time if you don’t have the proper support. A CFO will lighten your financial workload so you can focus on more important decisions.

A CFO can help your business grow in several ways, including:

• Negotiating better deals: A CFO can help your company score better rates with vendors, secure credit lines and loans from banks, and negotiate with clients to give your business a financial advantage.
• Managing financial growth: A CFO will track all financial metrics across the board at your company and work hand in hand with each department to optimize financial growth.
• Managing risk: You can only manage so much risk yourself. An experienced CFO will enforce the right financial controls and keep a vigilant eye on financial data to avoid any errors.

Controller

You may want to consider hiring a controller if:

• Your business is expanding: If you are scaling your growing business and your company is becoming more complex as you add lines of businesses or open new locations, a controller can make recommendations to help you use your capital wisely and save money wherever possible.
• You need to supplement your accountant: there is a significant difference between an accountant and a controller. A controller can supervise your accounting team and streamline your financial processes.
• Your CFO is overwhelmed: A controller can take a load off your CFO by focusing on the day-to-day supervision of the accounting team. They can provide the CFO with the necessary information to help them make accurate financial forecasts that support future strategic decisions for the business.

A controller can also help your business grow in several ways, including:

• Taking accountability for your company’s finances: Your controller will take full responsibility and accountability for your company’s financial systems and should thoroughly understand your business expenses from your financial statements.
• Finding areas where you could save on costs: Controllers find ways to improve profitability and budgeting, helping all departments align on decreasing expenses and improving product margins through cash flow management.
• Creating value as a business advisor: A controller can manage vendor relationships to ensure the best terms and contracts. A good controller will push back on spending decisions and offer advice on ways to cut costs and use capital wisely, often opening funds for more proactive initiatives for the business’ ultimate growth.
• Managing your company’s data: Your controller will supervise accounting processes and ensure they are carried out accurately, efficiently, and securely. Good controllers stay current on accounting and finance technology and best practices to keep your business on the cutting edge.

Outsourced vs. in-house controller

Outsourced controllers are likely less of a financial commitment than hiring in-house. In-house controller hires require longer timelines, with interviews, background checks, recruiter fees, long contracts, benefits, and incentives. An outsourced individual or an in-house hire would be an experienced controller who would report financial results for your accounting department.

Outsourced controllers are already trained in processes that save time. Far less training time is needed when you work with an outsourced controller. An outsourced controller will have experience in various industries, providing innovative solutions to old problems. In-house controllers may not have experience in your industry, missing opportunities to cut costs or amend business practices that may not be optimal.

Vacations and time off will not leave your company high and dry when you rely on internal controls. With an outsourced controller on your team, you will have access to accounting and bookkeeping expertise when needed. The deeper bench that outsourcing offers is one of the major benefits of outsourcing finance and accounting roles.

Contact us today to learn how we can help you optimize your company’s financial future.