Do you hire a CFO or a Controller?
The Role of a CFO
Controller vs Comptroller
Chief Financial Officer (CFO)
Controller vs CFO
In order to fully understand the relationship between a Financial Controller vs a Chief Financial Officer (CFO), one needs to understand what the responsibilities of each are. The responsibilities can be compared and contrasted so that you can reach a comparison.
A Controller is responsible for the accounting and record keeping of an organization. Additional responsibilities can include management of information technologies, insurance, sales tax reporting, federal income tax reporting, outside CPA audits and human resources. Controllers are in essence responsible for the financial and regulatory compliance of the Company. Think of controllers as the “historians” for the company.
Though a CFO is ultimately responsible for the financials of a company, the role of the CFO is more encompassing. They will often review the financial statements, but, that is only to get a prospective of past performance. The CFO will take then those numbers and analyze them to improve future performance working closely with operations and management. CFO’s are key in developing and implementing strategy for the company to achieve it’s goals.
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Origins Of Comptroller vs Controller
The difference between a controller vs CFO is primarily one of perspective. A controller focuses on compliance and historical record keeping or, in other words, tactics; while a CFO focus on planning and future performance (i.e.: strategy). Although controllers typically come from an accounting background, the same cannot be said for CFOs. Because of the automation of the accounting process more and more CFO’s are coming from a financial or banking background.
Determine the Value of a Controller vs CFO
How do you determine the value of a controller vs CFO? Maintaining the financial records of a company, while important, often is not perceived as a high value added function. Due the historical nature of the job closing the books is necessary to planning and strategy, but is often not the key driver of future performance. On should note, however, that a CFO can not do their job with good financial information.
So how does a CFO vs Controller add value? A good CFO should be able to influence how prices are set, efficiencies in the use of labor and assets and the optimum allocation of resources. As a result, a CFO should be able to improve profitability 1% to 2% of sales. Depending on the revenue of an organization this amount can be equal to hundreds of thousands of equity! No wonder the salary of a CFO vs Controller is often 45% to 50% higher.
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What is a Controller?
A financial controller is an individual in a company that is the head of the accounting division within the company. In order to understand the controller vs CFO relationship, it makes sense to understand what a controller does first. This list of responsibilities for the controller is an extensive one:
- The controller needs to have a complete and thorough knowledge of all the accounting procedures in a company.
- In addition to the procedures, a controller needs to have extensive knowledge on the software that goes in to the financial business.
- Payrolls need to be accurately and timely surrendered.
- Compiles the data from weekly job reports.
- Maintain all bank accounts and cash balances.
- Be able to prepare financial reports whenever necessary
- Assist in internal control between jobs and employees.
Clearly the job of a controller is an extensive one. However, the CFO carries much more responsibility than the financial controller. This extra responsibility transfers into the paycheck as well.
What is a CFO?
In terms of the entrusted responsibilities of the CFO vs controller, check out the following list:
- The Chief Financial Officer has a much larger role in an organization than does a financial controller.
- While the controller is the head of the accounting in a company, the CFO is responsible for, and has to observe every financial and operative function of the organization.
- A controller looks after the accounts, while the CFO has to be aware of all the business operations in a company that relates to the controller’s accounts. In addition to understanding the interrelation of the financial system.
- The Chief Financial Officer must be able to identify heavy business risks and make appropriate business decisions regarding those risks.
As stated before, because the CFO vs Controller has more responsibilities assigned to the job, the pay is also better as well. According to www.payscale.com, the maximum salary for a financial controller is $126,373 while the average maximum salary for a Chief Financial Officer is $237,051. If the training is available and attainable, it makes sense to take the extra practice and training necessary to become a CFO if one is concerned with earning a more positive paycheck.
Regardless of whether you are a CFO or Controller, you should strive to be the financial leader in your company. Download the free 7 Habits of Highly Effective CFOs to find out how you can become a more valuable financial leader.
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