If your business is rapidly growing, you may be feeling the need for an Interim CFO (Chief Financial Officer) or controller. However, sometimes it can be difficult to know which one you need. The truth is, your business needs both, because the two positions do two very different things.
Both controllers and CFOs have a background in accounting and generally begin their careers as accountants. An accountant’s role in a company is mainly recording keeping and financial reporting. Once an accountant reaches the point of being able to manage several different activities as well as supervise others, that accountant can become a controller. In this way, the position of controller is a natural progression from that of accountant.
A controller is basically a chief accountant, mainly concerned with business performance data as well as with maintaining the records and books that report the data. This is certainly an important role in any company.
While a CFO must have a fundamental knowledge of accounting and financial reporting, the position requires a much broader range of knowledge including that of funding and capital structures, taxes, payroll, forecasting, business operations and all the financial systems that underpin the business. CFOs must also always look ahead for potential risks in order to steer the business away from them. Perhaps more than anything, CFOs are big picture thinkers, problem solvers and decision makers.
However, CFOs certainly do not work alone. The reports a controller generates make it possible for a controller to produce cash flow and working capital models. In turn, a CFOs management and financial oversight allow a company’s management team to make decisions that will grow the business while effectively managing risk.
To break it down even further, CFOs handle analysis and solutions while controllers handle accurate reporting; CFOs deal with financing and forecasting while controllers stick to accounting and reporting; CFOs look at critical key indicators and look for new views while controllers adhere to standard formats and deal with the existing status; CFOs plan and implement with a future vision and controllers budget with an eye on the here and now; CFOs have a functional focus on compatibility and strategy while controllers focus on finances, compliance and tactics; CFOs “walk four corners” while controllers stay in the financial arena; finally, CFOs ask “what if” while controllers deal with “what is.”
No matter what type of company you run, having both a CFO and controller is essential for success.
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