Businesses owners often confuse the difference the between the role of a CFO and a controller. While there are some similarities — both are involved in a company’s financial leadership — the responsibilities are actually substantially different.
The role of a controller vs. a CFO
As head of accounting or a company’s accounting division, a controller typically handles accounting and bookkeeping tasks, overseeing payroll, receivables and payables, maintaining bank accounts and closing the books each month. He or she is responsible for ensuring the integrity and accuracy of management reports and maintaining business control systems. The controller position is very important and critical to the company. But the job of the CFO is much different.
Alternatively, a CFO is responsible for overseeing a company’s entire financial operations and, thus, is entrusted with a wider range of financial responsibilities and decision-making. Like business owners, CFOs are forward looking versus historical oriented as are CPAs and controllers. CFOs must have a broader understanding of all aspects of a company’s finances, as they manage fiscal performance in addition to strategy for all financial aspects of the business. A good CFO can make sure you and your key managers have critical information to do their jobs. Utilizing this information, the CFO will work closely with the rest of your management team to create and maintain meaningful budgets and projections – all centered on future cash flows. This allows you to have the data you need to make the best possible decisions.
Because a CFO has a larger role than a financial controller, the salary for a CFO is also much higher – often 2x to 3x the salary for a controller. This is why so many business owners don’t think they can afford a CFO. What they don’t know is a CFO’s effectiveness is directly tied to his or her understanding of a business, the goals of its owners and managers and key financial systems. A knowledgeable CFO can add value for a business even in as little as a few hours a week.
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