Many business owners and CEOs share a common misconception when it comes to the roles of a chief financial officer and a controller. Most incorrectly assume that their jobs are more or less the same, and end up hiring the same professional to do both jobs in an effort to keep the administrative costs low. As an ecommerce accounting firm, we see this mistake in action all too often, and how vividly this “money saving” tactic negatively impacts a company's bottomline. Therefore, it’s incredibly important to understand the differences between the two roles, and to realize the value created by each.
While both controllers and CFOs come from accounting backgrounds and start off as accountants, they part ways later in their careers. When an accountant becomes exceptional in financial reporting, and becomes capable of handling many activities and managing people, they might be offered the position of a controller. A controller’s role extends beyond the skills of a bean counter or conducting simple functional tasks, yet it remains confined to the accounting department.
A controller can’t become a CFO without having developed an incredible accounting expertise with experience, and an executive leadership skill set that extends broader than the accounting department.
Before we dig deeper into the controller vs. CFO debate, let’s learn about each role individually:
THE ROLE OF A CONTROLLER
A controller is a management level expert who serves as the head of the accounting department and supervises financial reporting, such as the preparation of financial statements.
They assign duties to accountants, make sure that reports generated are accurate, analyze data, and issue reports to the CFO for decision-making.
A controller would also manage and curate the technologies involved in housing financial data and running analysis reports like benchmarking your company against the industry niche you operate in, or your industry as a whole. They are also responsible for monitoring all internal controls, carrying out compliance audits, taking part in the budgeting process, and reviewing the financial data at varying depths.
THE ROLE OF A CFO
A CFO, or chief financial officer, is a senior executive who examines the accounting data issued by the controller, offers financial oversight, and makes decisions that will help the business grow and manage risks.
A CFO is like the financial heart of a company. They manage the pulse of a company’s financial health by actively tracking cash flow and proposing any corrective actions as needed. Since it’s a strategic role that requires critical thinking, a controller needs a broader skill set to grow and become a CFO.
While the exact duties of a CFO vary from one company to another, they typically take care of financial analysis, forecasting, planning, devising solutions, raising funds or financing, coaching other financial professionals, and implementing planned strategies.
The role of a CFO is not confined to the finance department. Their financial and accounting expertise allows them to make decisions that impact the business as a whole. Therefore, they work with all departments to decide how the financial system and operations go hand in hand.
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 and operational side of the business, while using the financial statements to predict business outcomes and devise a growth strategy.
The main focus of a controller is to ensure accuracy in financial reporting and tax compliance and may, at most, manage certain aspects of HR and IT, whereas a CFO needs to have a bird’s view of the business and advises the rest of the senior management, including the CEO.
In order to solve the problem of this common misconception, Fully Accountable has developed specific solutions for ecommerce business owners that offer accounting and Fractional CFO packages based on unique company needs.
Both controllers and CFOs should be able to grow with your organization. Not only should they be experienced in the same industry as yours, but they should also have worked in a similar company as yours. At Fully Accountable, we have a team of controllers that specialize in digital finance and have built an executive team of CFO’s with a plethora of experience across industry niches.
Imagine the efficiency of your back office being run like a profit center! Gain access to having dedicated controllers and a Fractional CFO on your team. We’ve developed a system to help transform your accounting department into a powerhouse that produces readily consumable reports, with tactical strategies to implement into operations, and positively influences the CEO by defining, analyzing, and improving key business performance metrics.
Learn more about how we can be your catalyst to growth by transforming your accounting department into a profit center, and download our complimentary Complete Business Growth Package, or schedule a call with one of our digital finance experts!