CFO vs. Controller: Do You Know the Difference?

Most large corporations have a diversity of job titles in their finance department. These large entities will often employ both a controller and a chief finance officer, or CFO. If you’re not a large corporation, you may be wondering if you need both. Before you can determine your needs for a controller and/or a CFO, it’s important to understand the difference between the two job titles. 

What’s the Difference Between a CFO and a Controller?

In some businesses, the two job titles and their duties may seem identical. The differences are subtle but meaningful. 

Controller Tech Target describes the job of a controller as, “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. In addition to preparing reports, the controller’s responsibilities may also include compliance audits, monitoring internal controls, participating in the budgeting process, and analyzing financial data to varying degrees.” 

CFO Tech Target outlines the CFO’s duties as including “financial planning, managing financial risks, keeping track of cash flow and expenditures, handling investment and taxation issues, creating and enforcing internal accounting and financial policies, collecting and managing financial data, reporting financial performance to the board, and helping develop the strategic direction of the company.”

There are similarities between the two positions, but the difference lies in strategy. CFO are frequently tasked with the organization’s finance strategy as well as fundraising efforts. A controller’s responsibilities usually end with ensuring accurate finance and accounting reporting. While a controller is essential for ensuring accurate balance sheets, the CFO’s position goes further: translating those numbers into opportunity and future planning. 

Your Needs Will Depend on Your Business

Is your business mature? Is it in growth mode? Are you transitioning to a new business line? Your situation may dictate the answer to your financial expertise needs. You may be finding that your financial reporting is underwhelming, even inaccurate. Perhaps you’re seeking new funding to grow or expand. You might be facing a cash crisis. (In the COVID era, this would not be an unusual situation.) You may suspect you’re not tracking the right financial metrics and your reporting is suffering. All of these situations merit the consideration of a controller and possibly a CFO. 

Hire a Professional

Not all companies have the in-house expertise or resources to hire a full-time controller and CFO, in which case, it’s often a good idea to outsource one or both of these functions. To learn more about outsourcing your financial expertise, consult with a professional. DOAAR is a small business bookkeeping, tax, and consulting services firm, with an additional focus on its clients’ personal finances. Specializing in bookkeeping, controller, and CFO services, DOAAR’s offering spans daily accounting, month-end close, complex financial modeling, and oversight. From execution to analysis and strategy, DOAAR provides clients a powerful and fully integrated back-office accounting solution. We have locations throughout California and the rest of the U.S. Visit our website for more information or to contact us.