What Separates a CFO from a Controller?

Business owners are often unsure what to expect from their financial person. All financial people are not created equal. There can be significant differences due to experience and aptitude. In companies with revenues between $5 and $50 million financial people generally perform at two different levels. 

Differences Between a CFO and Controller

Controller

• Supervise all Accounting Functions and Staff
• Budgets & Projections
• Tax Compliance
• Cash Management
• Basic Special Projects and Analysis

Chief Financial Officer​

• Supervise Controller Duties
• Financing and Banking Relationship
• Financial Viewpoint on Management Team
• Confidant of Owner
• May Oversee IT and HR
• Special Projects like Acquisitions
• Help Set Strategic Direction

*Companies with revenues under $50 million
Companies with revenues under $50 million generally will have a controller or a CFO but not both. As a way to more clearly differentiate between what to expect from a Controller vs. a CFO following is a listing of typical financial management tasks. Those that require the experience and insight of a person at the CFO level are designated by a (CFO).

Bring the Numbers to Life:

• Financial Statements
• Monthly Reporting Package
• Comparison with Budget
• Comparison with Prior Periods
• Trend Analysis
• Explanation of What’s Behind the Numbers (CFO)
• What Action Do the Results Suggest  (CFO)  

Provide The Metrics for Success

• Weekly / Monthly Statistics and Graphs
• Cost Analysis Especially Major Items
• Effective Wage Rates
• Performance against Compensation Plans
• Make vs. Buy or Lease vs. Purchase Analysis
• Profitability of Jobs, Customers or Products  (CFO)
• Productivity Information  (CFO)
• Focus on what really “Drives” the Business  (CFO)
• Evaluate and Update Systems eliminating things that don’t add value  (CFO)
• Fact Based Analysis of Special Opportunities  (CFO)

Manage the Cash

• Collect Receivables
• Prioritize Disbursements
• Project Cash Requirements  (CFO)
• Formulate Debt Structure  (CFO)
• Support Banking Relationship with Credible Information
• Look for Ways to Enhance Cash-flow like Progress Payments, Consignment Inventories or streamlining internal billing processes  (CFO)

Project and Protect

• Establish Benchmarks & Budgets
• Oversee Granting of Credit
• Review and Approval Procedures over Disbursements
• Cost Accounting & Job Cost  Systems
• Ensure Tax & Regulatory Compliance
• Implement Internal Controls
• Seek Competitive Bids
• Facilitate Preparation of a Financial Plan  (CFO)
• Evaluate Pricing Strategies  (CFO)
• “Mind the Store”  (CFO)

Supply the Financial Perspective

• Management / Team Meeting
• Supervise the Accounting Function, Serving as Coach and Mentor to the Staff
• Responsibility for External Relationships
• Bring all of the Above Facts & Knowledge Together to Improve Management Decisions  (CFO)
• Be an Objective Sounding Board  (CFO)
• Proactively Address the Financial Impact of Problems and Opportunities   (CFO)
• Assist in Setting the Company’s Strategic Direction  (CFO)