CFO vs Controller: What a Small Business Really Needs » FuseCFO

But as your firm
grows, you might start adding new products and services to the mix, and this
complicates your business model. At the same time, adding new members to your
team (some of whom might be remote workers, some of whom might be freelancers)
adds complexity to your costs and expenses. At this stage, you’ll want to work with an
experienced controller or CFO who’s cfo vs controller a proven value creator. This person will
provide insight in the future consequences of management decisions made today,
identify problems that might occur further down the road, and provide
recommendations on how to address these problems. As stated before, because the CFO vs Controller has more responsibilities assigned to the job, the pay is also better as well.

• Businesses of all sizes can potentially benefit from hiring both a controller and a CFO, whether they’re in-house or outsourced roles.
• Since left-brainers tend to enjoy deep dives, now is the time to rally your analytical prowess as you take an informational plunge into the respective roles and responsibilities of these money managers.
• Many companies choose to hire a controller when they really need a CFO.
• Our goal is to help companies move the needle by scaling and accelerating growth, optimizing resources, overcoming obstacles, and maximizing shareholder value.
• They oversee financial planning, track cash flow, and analyze the company’s strengths and weaknesses so they can recommend proposed actions.
• A controller is typically responsible for managing the daily financial tasks, while the CFO is responsible for the overall financial health and growth of the company.
• Management of companies and enterprises employed 69,900 (11%), the government employed 44,800 (7%), and manufacturing employed 42,100 (6%).

Nonetheless, small businesses — like all businesses — are still responsible for executing all of the core bookkeeping, accounting and financial functions essential to the enterprise. Controllers and CFOs are very involved in a business’s financial picture and planning. 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.

Financial Issues Small Businesses Face

Controllers also manage the monthly, quarterly, and annual financial close process, ensuring the financial statements are produced in accordance with GAAP. Other important duties include tax accounting, management reporting, and variance analysis, as well as managing both internal and external audits. Small-to-medium-sized businesses have evolving needs for bookkeeping and accounting as their operations grow.

• Preferred CFO is regarded as one of the most experienced outsourced CFO firms in the United States.
• In general, we see businesses of less than $25 million in revenue make use of a “Fractional” or part time CFO — meeting with them on a monthly basis to review results and plan strategy.
• If you’re still not sure whether you need a controller or CFO, consider the points below.
• However, a company could and should hire a Fractional CFO to support the business with a strong financial strategy in the meantime.
• If
  you start off selling just one product or product line, this will be fairly
  straightforward to manage.
• Businesses that generate between $5-$15 million in annual revenue (depending on complexity) would benefit from hiring a full-time Controller to manage their accounting functions and team.

In a nutshell, while a controller certainly must be well-versed in accounting practices, he is in a more senior position than an accountant. In fact, many controllers oversee the work of accountants in their department. Since left-brainers tend to enjoy deep dives, now is the time to rally your analytical prowess as you take an informational plunge into the respective roles and responsibilities of these money managers. In the end, the differences between a CFO and controller should be so clear that you’ll be able to separate them without the benefit of an Excel spreadsheet. – you may have hit a speed bump in deciding whether to set your sights on becoming a controller or a chief financial officer, commonly abbreviated as CFO.

Forward-looking versus day-to-day focused

Their ability to think long-term and develop creative solutions to financial challenges sets them apart. First, controllership is the collecting, analyzing, and reporting of financial information to help a company make informed business decisions. Focused on future strategy, not just historic numbers, we help small to mid-sized businesses and startups reduce financial risk and grow. You get access to our consistent team of experts — priced by the hour, so you only pay for what you need. We’re collaborative, explaining what the numbers mean, rather than just emailing reports. Controllers are responsible for providing timely financial information and reports so you can make intelligent, information-based business decisions.

• Though controllers and CFOs have several things in common, they are very different positions.
• Of course I’m biased, but only a team can efficiently provide both CFO and Controller (and accountant and clerk!) roles for a small business.
• The median annual salary for chief executives was $189,600 as of May 2018.
• The CFO position performs strategic analyses and is responsible for planning your financial future.
• Our CFO’s will be happy to help you with the full spectrum of financial activities from bookkeeping to strategic decision-making, so that you can maximize your company’s potential.

As a separate consideration, if what you really need is tax strategy–minimizing tax burden, keeping records, and filing taxes, then you may actually be in need of a CPA. Click here to learn more about outsourced CFO services from Haines & Lagerquist CPAs. A competent Controller paired with a qualified CFO is an effective combination for a business. Controllers can become CFOs, but the skills required in the Controller function often make up only a fraction of the necessary skills for the CFO role. If
you start off selling just one product or product line, this will be fairly
straightforward to manage.

CFO duties

Due the historical nature of the job closing the books is necessary to planning and strategy, but is often not the key driver of future performance. On should note, however, that a CFO can not do their job with good financial information. A good CFO should be able to influence how prices are set, efficiencies in the use of labor and assets and the optimum allocation of resources. As a result, a CFO should be able to improve profitability 1% to 2% of sales. Depending on the revenue of an organization this amount can be equal to hundreds of thousands of equity! No wonder the salary of a CFO vs Controller is often 45% to 50% higher.

There are two types of key financial leadership roles in a modern business – the Financial Controller and the CFO. Mix them up and you will not secure job interviews or suitable candidates if you want to hire real talent. These two roles are not the same and neither of these is the same role as an accountant. In May 2018, the BLS reported that 21% of chief executives (55,600) were self-employed workers or entrepreneurs.

They focus on future cash flow more than historical data, and are experts in long-range operational planning and making sure every arm of the company is performing sustainably at peak performance. https://www.bookstime.com/ CFOs and financial controllers usually come from an accounting background and start off as accountants. The accountant’s role is that of record-keeping and financial reporting.

• So if you come across a company with a controller but not a CFO, or vice versa, it might be interesting to make a polite inquiry about why.
• If a full-time CFO is not feasible, consider the benefits that a part-time CFO and controller can deliver to your business.
• On a higher level, the CFO enables and drives strategy, providing a lasting impact on your business.
• 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.

The controller reports to the CFO, sometimes alongside the treasurer and tax manager. Fractional CFOs are an attractive option for small businesses or startups that can’t afford a full-time CFO. They can also be a good solution for companies undergoing a transition period, such as a merger or acquisition. They most often report to the organization’s CEO or board of directors in the nonprofit sector or senior government officials in the case of the public sector. This is largely due to the number of similarities found in both roles and that many businesses use the two words interchangeably.

When to Hire a CFO

These range from taxes and compliance on the one end, to funding growth and making strategic financial decisions on the other end. Record keeping is fairly self-explanatory;
this involves tracking all transactions within your business, including sales
and purchases, expenses, rent, etc. Now that you understand the roles of a controller and CFO, and what each can do for your business, which one do you hire?

The controller then translates that vision into day-to-day managerial action. The controller is responsible for maintaining accurate books and reports and for running the day-to-day accounting operations of the business. Of that group, 263,200 were classified as “chief executives,” which includes CFOs and other C-suite executives.