Controller vs CFO: Which Does My Business Need?

Cfo vs controller

It is common for controllers to have at least 10 years of experience in accounting to show an increase in responsibility and higher-level accounting function along the way. According to CFO.com, the average cash compensation for a CFO providing CFO services for startups such as in a private company with less than $20MM in annual revenue is $194,354. CFOs for private companies with $21-$99MM in annual revenue make an average of $237,983 in base salary. (Private company CFOs make 45% less than those at public companies.) Tack on benefits and bonus and you can expect to pay $225,000 to $275,000 depending on business size.

Cfo vs controller

The CFO is responsible for the overall financial health of a company, while a comptroller or controller focuses on more specific aspects of financial management. Controllership duties hold the CFO responsible for presenting and reporting accurate and timely historical financial information of the company. All stakeholders in the company, including shareholders, analysts, creditors, employees, and other members of management, rely on the accuracy and timeliness of this information. It is imperative that the information reported by the CFO is accurate because many decisions are based on it. In large corporations, a controller would report to the head of the accounting department or to the CFO. But in a small business, financial controllers report directly to the CEO.

In terms of duties and responsibilities, there is no practical difference between the two titles. Comptrollers and controllers have the same position, but controllers work for businesses and comptrollers work for nonprofits and public sector organizations—often for local, state, and federal governments. As an outsourced finance department provider, we recruit controllers quite often. If you decide to hire a controller and/or CFO, we can help with some resources. In addition to the qualifications listed below, see our post 5 Questions Every Owner Should Ask Their Controller and The Average CFO Salary (2018) + 28 Key CFO Interview Questions (coming soon).

CFO Annual Pay

With an outsourced financial controller on your team, you will have access to expertise in accounting and bookkeeping when you need it. The deeper bench that outsourcing offers is one of the major benefits of outsourcing finance and accounting functions. A controller prepares financial reports like income statements and balance sheets. They also monitor internal controls, handle compliance audits, assist with budgeting and, to a certain degree, analyze financial information. Some controllers might evaluate and choose the technology to be used in the company’s financial departments. Controllers and CFOs are very involved in a business’s financial picture and planning.

Cfo vs controller

Look for a track record of building and executing strategies that successfully improved efficiency and profitability in addition to technical skills. The ideal candidate will have strong financial planning, risk management, leadership, communication, and problem-solving skills. The CFO and CEO collaborate to make a case, based on the CEO’s vision and the CFO’s data, to get company-wide buy-in for changes in direction and new ideas. Internal controls are developed, monitored, and implemented by financial controllers in order to mitigate the occurrence of accounting errors, irregularities, and fraud. They also generate reports that prove the efficacy of these controls which are used by the CFO to aid in forecasting and planning.

Education and Skills

Companies of all sizes use financial controllers; the need is often more dependent on industry than size. Once your company started to grow, you delegated accounts payable to one staff member and accounts receivable to another. Maybe you even hired a full-time or part-time bookkeeper to create accurate financial reports and take your business decisions to the next level.

By $10MM, the controller is more involved with managing internal controls, closing processes and report generation, as these tasks are more intensive and time-consuming than in smaller companies. At this size, there are many more moving parts in the accounting function, so the role is that of a classic controller. Ultimately, the decision of when to hire a CFO depends on the specific needs of the business. If the business is experiencing rapid growth or working with complex financial products, then a CFO can be a valuable asset.

  • While they’re responsible for some managerial duties on the accounting team, their scope of work is more limited than a CFO’s.
  • Such a candidate will be uniquely equipped to understand the pressures of the CEO position and offer sage advice.
  • The CFO uses their financial knowledge to forecast and strategize for the business’s future, promote growth, and advise stakeholders.
  • Depending on the revenue of an organization this amount can be equal to hundreds of thousands of equity!

But we we do tend to see CFOs earlier and more often in some industries, such as tech companies with a lot of investor money at stake and where rapid growth is expected. According to PayScale.com, the median compensation package for a small business controller is $80,296. The complete range of salaries varies from $50,500 to $133,400 with influencing factors including company size and location. Here are some situations which often prompt small business owners to hire a CFO in addition to or instead of a controller. To give you a little more insight, here are some situations which prompt small business owners to hire a controller. The following chart offers a high-level comparison of controller vs CFO responsibilities and capabilities.

Companies with very simple accounting and reporting requirements may be content with a bookkeeper for some time. A controller is often one of the first hires for startups or small companies because the reports and metrics they provide are both a necessary part of doing business and the basis for future decision-making. The CFO is the finance leader and chief financial strategist of a company. CFOs play a significant role in laying out the direction for a company’s future and advising stakeholders on important business decisions. Chief Financial Officers identify business risks by looking at financial data and make appropriate decisions to mitigate those risks, among their many leadership functions.

It’s important for controllers to ensure that all of these aspects meet the legal and financial standards in the industry. The CFO holds the highest status in the finance and accounting functions of the organization. You may want to start with a good, hard look at your company’s financial records. 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. Both controllers and CAOs are accomplished leaders and experts in finance and accounting, but there are subtle contrasts that make these two roles complementary to one another.

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Depending on your situation, bringing a controller on board will alleviate some of your existing responsibilities. As a small business owner, there’s a good chance that you’ve been handling a large portion of your company’s accounting operations and bookkeeping tasks. If you have a large corporate with multiple branches across the border, consider hiring both to make sure that your financial operations and strategies are on the right track on a day-to-day and company-wide basis. If your business has reached $10 to $25 million annual revenue, you typically need a controller to streamline business expansion.

A controller can inform you of any potential bookkeeping issues before they get out of hand. The day-to-day life of a financial controller varies based on the company and its needs. Some of the tasks below will be completed by a bookkeeper and overseen or managed by a controller.

You may need an in-house CFO at either a large public corporation or a small private company, and while the financial strategies may differ, the responsibilities are similar. The truth is that your business operations may not require an executive team to run efficiently. Having a controller run the accounting department may make more sense based on the size of your business, the volume of work, and the budget. Often holding a CPA, controllers are accounting experts whose skill set and knowledge base revolve primarily around GAAP, tax laws, and financial reporting.

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For example, A CFO for a small company (~$10MM in revenues) will expect a base salary of around $200,000-$250,000. Add in variable compensation, benefits, and taxes, and you’re looking at between $300,000 and $400,000 (or more) annually. It’s also common for CFOs to pursue an advanced degree, such as an MBA.

For either position, compensation depends on factors including company size, industry, whether the business is public or private, staff size and location. The controller is more of a Chief Cfo vs controller Accountant, and this person reports to the CFO of a company. The controller’s duties involve managing the day-to-day finances of the business while coordinating income and expenses.

Roles and Responsibilities of a CFO

Whenever corporations need a public face for any speaking event, the chief financial officers also step into this role. They can announce new partnerships, discuss implications for security breaches, and provide answers to shareholders on behalf of the CEO and the organization. Maintaining the financial records of a company, while important, often is not perceived as a high value added function. 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.

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. At some companies, financial controllers are involved in evaluating and selecting technology for use within the finance department or other related departments within the organization. Technology plays a vital role in the jobs of both financial controllers and CFOs. Now, robust financial management systems that automate billing, revenue recognition, accounting, financial reporting, financial planning, consolidation and compliance are the norm in competitive companies. These systems provide real-time visibility and efficient processing at all levels within the financial organization.

First, consider the size of your organization and the complexity of your financial affairs. In general, larger organizations with more complex financial needs will benefit from having a dedicated financial controller on staff. If you have multiple income streams and are starting to see some serious cash flow, it’s time to start thinking about hiring a CFO. They can help you develop budgets and forecasting models, as well as manage investments and debt.

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