Controller vs  Comptroller vs. CFO: Key Differences to Understand

Controller vs Comptroller vs. CFO: Key Differences to Understand

These two financial leadership roles work closely together, but they are actually distinctly different jobs. Let’s first establish the basic responsibilities of each role, then dive into the factors you should consider to determine whether it’s time to hire one, the other, or both. The key difference between controller vs CFO is that a CFO oversees a company’s financial health from a holistic view, whereas a controller manages the day-to-day financial management tasks. The controller reports to the CFO and the CFO reports to the CEO, and is a member of the executive team. CFOs, as data-driven decision-makers, manage and work with the financial divisions to ensure that the reports are delivered on time. By analyzing cash flow and financial statements, they can identify strengths and weaknesses to propose an action plan for future growth.

  1. Make solid data-backed decisions, reduce costs and achieve consistent growth.
  2. CPA licensure requirements vary by state but usually include a bachelor’s degree and at least two years of accounting experience.
  3. The controller vs. CFO debate makes more sense to a large company than a small business.
  4. Before proceeding to the business’s hiring requirements of a controller vs a CFO, allow us to explain a bit about the duo and their job description or requirements for any business.

First, the CFO is future-focused, they’re looking at what is going on in the market, trends, and how to grow. The controller is looking at what happened today or what’s happened in the past. As an experienced entrepreneur himself, he has served in various C-suite leadership and advisory roles across a wide spectrum of industries. A controller is a senior level accounting position that attracts those with auditing, cost control, or accounting backgrounds. Occasionally a Controller will receive additional training and transition into a CFO role, but that’s not necessarily the natural next step. Small companies (~$10MM in revenues) can expect to pay about $200,000 per year (including bonus, benefits, etc.).

Now that you are aware of the key differences between a controller and a CFO, you might be wondering whether it makes sense to hire a CFO for your business. In low-margin firms such as product manufacturers or commodity contracts, controllers may be responsible for managing razor-thin margins to ensure sustainability. While we already looked at the roles of a CFO and a controller, let’s compare them closely. While CFOs have a strategic stance, the role of controllers is tactical. A CFO, on the other hand, is paid $130,872 a year in the US, on average, as stated by PayScale. Again, the average varies based on the education and experience of the professionals as well as the geographical location.

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Knowing when to hire a full-time CFO, fractional CFO, and controller is essential for growing your business. Strategic finance to drive business value, business forecasting and planning, financial fund-raising, and M&A are important skills for the CFO. Comptrollers serve government entities as the highest financial executive and some nonprofit organizations.

Healthcare and social assistance paid $174,000, and government paid $110,000. The scope of a financial controller’s role can depend on the size of the company or organization. In smaller companies, financial controllers oversee the company’s entire financial operations. In larger companies, the financial controller is typically still a business leader, but may report to the CFO. The role of the CFO overall is a financial strategy and business strategy. How do we use it to make the company better, bigger, stronger, and more profitable?

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Your business is evolving, tackling complex challenges, and ready for financial leadership. 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 controller vs cfo salary expected. 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.

At what stage of growth do companies hire a CFO?

When hiring a CFO, look for candidates with at least ten years of experience dealing with financial issues similar to your own. For instance, if you are planning to raise capital, look for a CFO who has successfully led such an effort in the past. Furthermore, if you can find a CFO who has built a company of their own, all the better. Such a candidate will be uniquely equipped to understand the pressures of the CEO position and offer sage advice. Since their role is to act as a trusted advisor to the CEO, President, and others on the management team, it’s important to choose someone with whom you can build a strong working relationship.

When to Hire a CFO

Controller salaries vary depending on experience, the size and location of the company, and the complexity of the industry. Controllers at small companies (~$10MM in revenues) typically make $150,000 annually. Factor in variable compensation, benefits, and taxes, and you’re looking at a total cost of approximately $200,000 per year.

The CFO is generally responsible for all budgeting, financial goal setting, and related financial reporting—including financial statement construction and review. Arguably, there has always been a need for CFOs, however, the position really only came about in the 1960s. This comes as companies’ finances, accounting, and bookkeeping have become more complicated. When bonuses are included in salaries, the median total compensation for a CFO is $597,030 per year.

They’re involved in financial planning and are responsible for tracking the cash flow situation and examining the organization’s financial strengths and weaknesses. Accountants and other financial professionals who aspire to fill a managerial role and become a controller or CFO can benefit from a graduate degree that takes their skills and business sense to another level. Whether you’re interested in diving into the details of a business’s financial state or focusing on high-level decisions, the right education can help propel your career forward. Explore how Maryville University’s online Master of Science in Accounting could be perfect for you. Outsourced finance and accounting solutions are great for companies that are pre-revenue up to $20 million in revenues typically. Obviously, if you’re going through projects, especially the smaller company level, this probably really starts to make sense.

The CFO’s primary responsibilities include developing and implementing financial strategies, overseeing financial planning and reporting, and managing the company’s investment activities. The CFO is also typically responsible for managing the company’s treasury function, overseeing tax compliance and risk management. A controller manages the functions and people for everyday bookkeeping and produces reliable and accurate financial statements for a specific period. On the other hand, a CFO supervises the financial as well as the operational side of the business and uses the financial statements to predict business outcomes and devise a growth strategy. A controller is a senior-level executive who serves as the head of the accounting department and supervises financial reporting, such as the preparation of financial statements. In addition to earning a degree, financial controllers typically have at least five years of relevant experience [1].

Generally, CFOs have held previous positions such as controller or director of finance. Their skills are in management, making sure the accountants and bookkeepers who work under them are doing their jobs properly in a high-stakes environment. They then provide reports to executives who make the corresponding decisions. A financial controller, or accounting manager, ensures that your company’s books and financial records are in order.

Add in variable compensation, benefits, and taxes, and you’re looking at between $300,000 and $400,000 (or more) annually. Even though the CFO and Controller have an accounting background, and have started as accountants, they have different roles to perform in business. Well, it can be said that the CFO has more roles in an organisation than a Controller. On the other hand, the Chief Financial Officer has to look into every financial and operative function of the organisation. The CFO looks after the financial planning, managing financial risks, financial reporting, and financial records. The CFOs are expected to be the main person to shape the organization from every corner and should be familiar with the technology.