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. If you are running a small business, your controller may do much of this work themselves. As you grow, however, they will need help and will assume the responsibility of hiring a team and leading the accounting department. The answer to this question depends on the size and complexity of your business. If you have a small business with simple financial needs, then one person can probably handle both roles.
We often see commonalities with controller roles based on the annual revenue of the company. Many controllers also possess a CPA (certified public accounting) or CMA (certified management accounting) designation. Controllers typically have an auditing, cost control, or accounting background and an undergraduate degree in accounting or a related field. Before a company hires a CFO in addition to a controller, in a smaller company the controller is also responsible for cash flow management. Do you know what you’re really spending on your accounting department?
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 expected. So, as you might imagine, there are many small businesses which have a controller or a CFO, but not both. For more information by geographic area, you can download the annual Salary Guide from recruiting and temporary hiring firm, Robert Half, which includes CFO, Controller, and accountant job salaries by job title and city. CFO base salary is $419 thousand, ranging from $318 thousand to $535 thousand vs. the average U.S. Controller base salary is $239 thousand, ranging from $199 thousand to $284 thousand.
A CFO has duties similar to its controller or comptroller, but the overall responsibility is different. The CFO is responsible for the overall financial health of a company, while a comptroller or controller focuses on more specific aspects of financial management. Small companies (~$10MM in revenues) can expect to pay about $200,000 per year (including bonus, benefits, etc.). Alternatively, you can reduce your costs by outsourcing this function to a firm that offers fractional finance and accounting services.
Bonuses, employee benefits, and equity compensation, including stock options, are extra compensation. A comptroller is the top manager of accounting, budgeting, and financial reporting functions, usually in a governmental entity or non-profit organization. Sometimes the job title of comptroller is used interchangeably with controller, which is the chief accountant of a business striving to generate profit. The CFO has to make all the critical decisions related to finance like cash flow projections, budgeting, deciding on which project to choose, and also take care of all the impacts of accounting changes. But as one person can’t look after everything, he has divisions who directly report to him.
The deeper bench that outsourcing offers is one of the major benefits of outsourcing finance and accounting functions. Outsourced controllers are already trained in processes that save time. Far less training time is needed when you use outsourced controller services. 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 this article, we’ll look at the three key differences between these positions.
If this is too rich for you or if you don’t need a full-time controller, there are alternatives. For example, at The CEO’s Right Hand, we provide accounting and bookkeeping services along with outsourced CFO services with packages starting at $4,500 a month. This will provide you with the support you need at just a fraction of the cost. A bookkeeper or accounting staff reports to the controller or business owner. In government entities or non-profits, the controller may be called comptroller and may serve as the highest ranking in the department responsible for budgeting and accounting.
The controller, also referred to as a comptroller in government and nonprofit businesses, is responsible for maintaining accurate books and records and for running the day-to-day activities of the accounting department. 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. A CFO also works with the CEO to develop long-term plans for the company and sets financial goals. Additionally, the CFO reports to the CEO and is part of the organization’s senior level / executive team. A controller or comptroller oversees the finance department and reports to the CFO. The CFO, or Chief Financial Officer, is the head of an organization’s finance team.
A comptroller is responsible for an organization’s overall financial management. This includes developing financial plans, overseeing investments, and managing bookkeeping tasks such as accounts payable. A comptroller also provides advice on how to reduce costs and improve revenue. 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. Does your business need a controller or CFO for its planning, financial reporting, cash management, and decision-making analysis?
- As part of their skillset, your company’s Controller and CFO should both understand generally accepted accounting principles (GAAP) and the accounting process to prepare the financial statements.
- When looking to hire a controller, seek candidates with at least ten years of experience.
- But at some point, unless the accounting department is adequately staffed and uses AP automation software to increase efficiency, the controller’s time will be spent on day-to-day activities rather than strategic finance.
- The CFO uses their financial knowledge to forecast and strategize for the business’s future, promote growth, and advise stakeholders.
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.
The controller carries out the implementation and day-to-day management of the operations of the accounting department. The controller’s oversight and account management enable the CFO to meet the company’s strategic goals. A good financial controller will develop efficient and effective strategies to increase profit margins, increase employee productivity, and find cost savings through cash management. A controller is one of the most influential people within your company’s accounting and finance department. 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. This includes developing long-term plans, setting financial goals, and overseeing the company’s financial health.
Reasons to Hire a Financial Controller
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. On the other hand, middle-market companies can expect to spend closer to $300,000 per year all in. A CFO is a Chief Financial Officer and is responsible for a company’s financial planning and management. They work with the Chief Executive Officer (CEO) to develop long-term financial goals and oversee the day-to-day financial operations of the business.
- To give your CFO and controller the right tools to add value to your company, consider the benefits of AP automation software that integrates with your ERP system or accounting software.
- As an outsourced finance department provider, we recruit controllers quite often.
- A Financial Controller is a senior-level executive responsible for a company’s financial management.
- A comptroller is responsible for an organization’s overall financial management.
As a general rule of thumb, most companies hire their first financial controller when annual revenue exceeds $5 million. That broad view of the business means only a small fraction of CFOs are focused solely on dollars and cents. The vast majority juggle responsibilities beyond finance and accounting, such as identifying strategic partnerships, evaluating technology and representing the company in public forums. They can provide the same level of expertise and experience as a full-time CFO but, at a fraction of the cost. First, controllership is the collecting, analyzing, and reporting of financial information to help a company make informed business decisions. According to PayScale.com, the median compensation package for a small business controller is $80,296.
Many controllers are content to forego such a transition and stick to accounting. Two choices are adding AP automation software to your ERP system and hiring a fractional CFO. The best AP automation software will increase efficiency and financial controls, reduce costs, and free up finance time for results-driving projects.
Comptrollers serve government entities as the highest financial executive and some nonprofit organizations. Your business should consider using AP automation software integrated with your ERP system to reduce the time to process invoices and make and reconcile global payments. Accounts payable automation speeds the monthly close process for financial reporting. This efficiency lets the controller spend more time on higher-level decision-support tasks using non-financial and financial information. CFO and controller salaries and other compensation vary by company revenues (size) and private vs. publicly traded status, and candidate qualifications and experience.
Controller and CFO Qualifications
Outsourcing all or part of your company’s controller needs is the perfect solution for small and medium-sized businesses that require a high-powered back office but can’t afford to fill the high-level jobs in-house. If there is no CFO, the controller must handle many different financial tasks, from routine bookkeeping to financial planning. For financial controllers, median annual salaries range from $90,000 to $110,000, according to several studies. As with CFOs, bonuses, stock options and other non-cash incentives are variable and increase overall compensation.
A CFO must be able to effectively communicate their findings and recommendations to the CEO and other members of senior management. A Financial Controller and Chief Financial Officer (CFO) are similar sounding roles. The CFO is an executive, working in the c-suite along with the CEO, COO, or any other executive-level employees. Allow us to help you determine if our team/system is right for your office. Call or send us an email using the form below and we will reply promptly.
Their skill set should include interpersonal and communication skills, good judgment, critical thinking, and management capabilities. You can expect proficiency in Microsoft Office products and relevant software, like QuickBooks and ERP solutions. CFOs tend to be involved in higher-level financial strategies and planning. A CFO will track the company’s growth and capital, provide an analysis of where the business is strong or weak, and develop a plan of action for improvements. While the controller is more typically focused on accurate financial reporting, the CFO is a financial planner.
Practically speaking, an experienced CFO can also provide access to an important network of other professionals. Most important, because CFOs are the only other corporate executive with a companywide focus, they are primary advisers to their CEOs.
The controller reports to the CFO, sometimes alongside the treasurer and tax manager. Most small businesses need both, which brings us to the third option. The difference between controller and CFO duties, in some organizations, may not be well-defined and there may be some overlap.