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The Difference Between a Controller and CFO

If you’re comparing the role of a controller to the role of a CFO, you are not alone. The differences lie in the fact that a controller’s responsibilities are mainly technical and tied to historical data, while a CFO’s responsibilities are mainly functional and related to the company’s future endeavors. A controller’s job is more accounting-related, and he or she deals with overseeing processes while the CFO is the CEO’s right-hand man and makes forecasts and strategic decisions based on data and reports supplied by the finance and accounting functions.

Responsibilities of a Controller

A controller is in charge of the accounting department and/or outsourced accounting activities depending on the company’s setup. If you have an in-house accounting department, the controller is in charge of hiring and managing the accounting team. The controller ensures day-to-day accounting processes such as cash flow maintenance, payroll, collections, and accounts payable are running as they should. A controller will also manage monthly and yearly closings and provide data for the budgeting process. He or she implements policies to ensure solvency and works to improve reporting and efficiency. A controller also helps ensure legal compliance when it comes to the company’s financial activities. A controller compiles and reviews historical data and reports the company's historical performance. The controller will work to improve processes and efficiency where necessary to help meet the company’s financial goals. He or she then passes on this data to the CFO who uses the data to build financial models that provide visibility into how the company is projected to perform in the future.

Responsibilities of a CFO

A CFO’s responsibilities primarily involve risk management and strategy. The CFO collects and analyzes reports from the controller and answers to the CEO. CFOs should have the insight to present new opportunities based on financial data and industry trends to the CEO, executives, and the board. He or she also captures new ideas and strategies from the CEO or other senior managers and builds financial models to advise on the best course of action. He or she develops, improves, and utilizes forecasting tools to provide the CEO and senior staff with the best possible financial insight for corporate initiatives. The CFO ensures that important business decisions are taken under financial advisory.The CFO also maintains relationships with investors and banks and prepares documents needed to obtain capital from investors. Other responsibilities include searching for insurance policies and employee benefits and interacting with vendors to ensure the company is getting the best possible deals. A CFO’s financial expertise is primarily used for looking forward to identify risks and opportunities for the company. This is why a CFO needs much more than finance experience to do great job. A CFO should have knowledge of the company’s industry and understand how the company works from a holistic perspective.

The CFO Solution for Your Business

In some smaller companies, the role of a CFO and a controller may be undertaken by one person. As a business grows, the need for two high-level finance executives becomes more apparent and necessary to maintain business growth and support the operations of a larger firm. Contact VantageCFO today to find out if hiring a CFO is the right decision for your business.

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