What Does a Controller Do for Small Businesses?

Cfo vs controller

When both are present within an organization, controllers and CFOs are interdependent, leveraging their talents to work together and help the entire financial organization achieve its objectives. Not only is a CFO responsible for a company’s past and present financial situation, they are also a key player in a company’s future growth potential. A CFO must be able to identify and report what areas of a company are most efficient and how the company can capitalize on this information. With that said, once you get serious about expansion and growth, you must have a concrete accounting policy in place — accounting software, accurate reporting, financial analysis, etc.

In May 2018, the BLS reported that 21% of chief executives (55,600) were self-employed workers or entrepreneurs. Another 11% (28,500) worked in professional, scientific, and technical services; 10% (26,400) in government; 7% in manufacturing (18,600); and another 7% in healthcare and social assistance (17,100). The BLS expects the job market for top executives to grow 6% between 2018 and 2028 but predicts the market for chief executives to fall 5% due to business consolidation.

  • Whatever your reasons, we’re glad you’re thinking about it, because, from our experience, most owners wait too long to get help.
  • In this position, they often report to the company’s CFO, executives, and shareholders.
  • The controller serves as the organization’s Chief Accountant and requires strong professional experience in accounting and financial reporting.
  • Pilot is not a public accounting firm and does not provide services that would require a license to practice public accountancy.

They can benefit your company by providing a balance of financial expertise and accounting services management that bridges the communication between C-suite and day to day functionality of the accounting department. CFOs are the highest-level financial professionals in a large organization. They’re big-picture thinkers who use the data brought to them by accounting and financial departments to help them strategize for the long term. CFOs work with other C-suite executives and high-level managers to develop new business strategies, ensure funding of new projects, and understand the nuances of a company’s financial picture.

How Much Does a Controller Make?

Your working capital ratio (also referred to as your current ratio) and cash conversion cycle are important measures of your company’s liquidity. The majority of CFOs are considering bringing automation into their financial processes. End-to-end automation can solve a lot of problems in finance functions, from reducing manual effort and financial risks to increasing agility and data Cfo vs controller accuracy. Some companies, depending on the size and needs, may need to employ both, either, or neither of them. After all, this job involves access to the financial information that a business owner does not want in just anyone’s hands. One of the qualifications we mentioned above which is common to CFOs and controllers is the ability to show visually appealing and useful reports.

Follow the above guidelines to know when the time is right to hire a CFO or if instead you should hire a controller. If you do already have a controller and your finance needs are becoming more sophisticated, it may be time to search for a CFO. Whether you’re looking to reduce labor costs or increase Return on Investment (ROI), find out how you can leverage automation to achieve business efficiency in our free eBook.

Cfo vs controller

CFOs and controllers are both seasoned professionals, with backgrounds in accounting or finance. In small companies where there is only one role, responsibilities tend to blur together, based on the needs of the company and its CEO. When there are distinct roles, their respective duties tend to line up as follows.

Establish an Accounting Department and Accounting Staff

Large organizations require separate roles for accounting and finance functions, as they have distinct responsibilities and cannot be effectively combined. Growing businesses may need more than just a bookkeeper or a team of entry-level accountants that process the day-to-day transactions. For companies looking to reach financial milestones or take the business to the next level, it may be time to consider hiring a chief financial officer (CFO) or a controller. The U.S. Bureau of Labor Statistics (BLS) places financial controllers in the category of financial managers, which also includes treasurers, finance officers, and insurance managers. The BLS reported there were 653,600 financial managers working in the United States as of May 2018. They earned a median annual salary of $128,000; factors that may affect a financial manager’s salary include the individual’s education, experience, and geographic location.

Cfo vs controller

Controllers will even set strict guidelines or standards of operations to prevent the same problems from reoccurring. Their scopes of work include (but are not limited to) procurement, budget reporting, forecasting, strategic partnership, mergers, acquisitions, and capital funding. Some CFOs might be controllers or accountants in the past, but such past experiences are not required. Some of them might previously delve into the fields of banking, investing, or business. Read more to decide whether you need a CFO, a controller, or both to run a successful financial strategy to scale your business.

As a member of the senior management team, the CFO reports directly to the CEO. At The CEO’s Right Hand, we provide strategic financial advice and tactical accounting support to clients across all industries. This means you don’t have to choose a controller vs CFO when you work with us because you’ll get both capabilities under one roof. In large companies, the controller reports to the Chief Financial Officer (CFO). In smaller organizations, however, the controller may report directly to the president or CEO. Contact Signature Analytics today to find out how we can help you optimize your company’s financial future.

The Essential Guide for Effective Financial Controllers

A CFO can help with short-, medium-, and long-term strategies, ranging from profit & loss (P&L), acquisition, to pricing decisions. Download our Executive Growth Reports now to see the kinds of reports a controller or CFO should deliver and keep them handy to compare with reports you receive from candidates. So, as you might imagine, there are many small businesses which have a controller or a CFO, but not both.

So, they must be detail-oriented, trustworthy, and knowledgeable about the rules and regulations that affect your industry. The accounting department may be missing critical opportunities if there is no one in the role of controller. Not only that, but the CFO may be working overtime to get all the information they need to make accurate decisions. Likewise, without a CFO, the larger fiscal picture may be neglected, and the company may not have an accurate forecast of future finances. The controller’s role is more hands-on in that they’re responsible for creating, implementing, and overseeing the functional policies and procedures that collect, record, and report financial data. A comptroller is responsible for an organization’s overall financial management.

Far less training time is needed when you use outsourced controller services. Indinero’s fractional CFO services can help your business grow smoothly. We’ll work with you to develop a financial strategy that meets your specific goals. Our team of experts will help you make smart decisions about how to best allocate your resources. We’ll also provide advice on ways to reduce costs and improve revenue. A CFO’s duties include developing financial plans, managing cash flow, reviewing financial statements, overseeing investments, and advising on ways to reduce costs and increase revenue.

  • If there is no CFO, he/she is often the financial advisor for the CEO (playing “up” in the role) by interpreting financial reports and sounding warnings.
  • The truth is that your business operations may not require an executive team to run efficiently.
  • 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.
  • 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.
  • GrowthForce accounting services provided through an alliance with SK CPA, PLLC.

Any business, no matter how big or small, needs someone to keep an eye on the finances. Controllers typically have an auditing, cost control, or accounting background and an undergraduate degree in accounting or a related field. We also use different external services like Google Webfonts, Google Maps, and external Video providers.

Financial Issues Small Businesses Face

Such a candidate will be uniquely equipped to understand the pressures of the CEO position and offer sage advice. Pilot is a provider of back-office services, including bookkeeping, controller services, and CFO services. Pilot is not a public accounting firm and does not provide services that would require a license to practice public accountancy. Keep in mind that the functions we discussed above aren’t mutually exclusive – if it seemed like the two roles can have significant overlap, that’s because they can. At smaller companies, it’s common for a CFO or controller to take on duties that might normally fall under the other role.

What Is a Financial Controller?

It is quite possible that you’ve seen other businesses with CFOs and controllers who have the exact same responsibilities. Hopefully, by the time you’re done reading this post, you’ll have a clear understanding of what these roles typically cover, where they sometimes overlap, and how you can plan out the makeup of your finance team. Though the Chief Financial Officer (CFO) and the financial controller work closely together, they have significantly different roles within a company. The biggest distinctions can best be described by breaking down the operations and responsibilities of each role.

In May 2018, 30% of financial managers (193,000 employees) worked in finance and insurance, while professional, scientific, and technical services employed 90,700 financial managers, 14% of the workforce. Management of companies and enterprises employed 69,900 (11%), the government employed 44,800 (7%), and manufacturing employed 42,100 (6%). The BLS expects the job market for financial managers to increase by 16% between 2018 and 2028, adding around 104,700 jobs during that span. There are two schools of thought regarding how big a company should be before hiring a CFO.

A financial controller will help implement your bookkeeping policies and keep them up to date as your company evolves. Most small business owners don’t establish a sound financial strategy or official accounting procedures when launching a startup. While it’s obviously in your best interest to do so, you can get away without having firm bookkeeping policies for a while.

Two types of professionals who help businesses stay on top of their finances are financial controllers and chief financial officers (CFOs). Continue reading to learn more about these two positions and discover what defines them, what sets them apart, and educational paths that can help get you into one of these lucrative careers. 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. They have the responsibility of producing financial statements that guide the movement of the company forward.

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