Controller vs CFO: The Financial Decision-Makers Every Business Needs

When managing a company’s finances, the roles of controller and chief financial officer (CFO) are crucial but distinct. Both positions are responsible for ensuring a business’s financial health, yet their duties, decision-making power, and focus areas vary greatly. Understanding the differences between controller and CFO is vital for anyone involved in corporate finance or business management.

Getting To Know the Controller and CFO

A controller is a senior-level accounting professional responsible for overseeing the preparation of financial reports, managing accounting staff, and ensuring compliance with financial regulations. Controllers play a key role in maintaining accurate financial records and providing insights to help drive business decisions.  Controllers are often seen as the backbone of an organization’s accounting department, handling the day-to-day financial operations. Their main responsibilities include:

• Compiling balance sheets, income statements, and cash flow statements.
• Assisting in the budgeting process and monitoring how well the company sticks to its budget.
• Establishing and monitoring internal control processes to safeguard firm assets.
• Ensuring the company follows tax laws and financial regulations.

On the other side, the Chief Financial Officer (CFO) is a C-suite executive in charge of the organization’s overall financial strategy. Unlike the controller, the CFO’s role goes beyond accounting to include strategic planning, investor relations, and risk management. CFOs are typically involved in high-level decision-making that shapes the company’s future direction. Key responsibilities of a CFO include:

• Developing long-term financial strategies that are consistent with the company’s goals.
• Analyzing financial data to spot trends and growth opportunities.
• Communicating with investors and stakeholders about the company’s financial health and performance.
• Managing the company’s financial structure, financing strategy, and investment decisions.

Controller vs CFO: Key Differences

Recognizing the differences between controller and CFO comes down to the scope, focus, and authority of each position.

Education Requirements

Controllers typically hold a bachelor’s degree in accounting, finance, or a related subject. Many people pursue certification, such as obtaining a CPA (Certified Public Accountant), to demonstrate their knowledge. Some may even pursue a master’s degree to move ahead in their careers.

CFOs often have an MBA (Master of Business Administration) or a degree in finance or business. They may also have certifications like CFA (Chartered Financial Analyst) or CPA, especially if their role involves complex financial decisions.

Scope of Responsibilities

The controller supervises the company’s daily financial operations. In most cases, the controller is not considered an executive. Their role is to guarantee that the company’s financial data is correct and consistent with legislation. Controllers are in charge of responsibilities such as preparing balance sheets, keeping general ledgers, and monitoring cash flow.

The CFO, however, is responsible for strategic financial management. They focus on forecasting future growth, financial planning, risk management, and making decisions that drive the company forward.

Level of Decision-Making Power

A controller has operational authority, but they typically report to the CFO or finance director. They focus more on executing tasks and providing accurate financial reports, rather than making high-level decisions.

The CFO is a key decision-maker within the company’s executive team. They make high-level financial decisions and are responsible for long-term financial planning. The CFO reports directly to the CEO or board of directors and has significant influence over the company’s financial direction.

Strategic vs Operational Focus

The controller’s focus is operational. They ensure that the company’s financial systems and reports are accurate and follow compliance standards. Controllers play a vital role in financial reporting and ensuring that the company’s daily finances are handled efficiently.

The CFO has a strategic focus. They are responsible for guiding the company’s financial growth, managing investments, securing financing, and overseeing long-term financial strategies.

Interaction with Company Leadership

While the controller works closely with other senior managers, their interactions are mostly focused on providing the data needed to support decisions made by the CFO and other leaders. The controller is not typically involved in the high-level decision-making process.

The CFO is a member of the executive team and plays a direct role in developing business strategy. They participate in leadership meetings with the CEO and the board, and their role is critical in advising on long-term business strategy.

Reporting Structure

The controller is often responsible for the operational aspects of financial management and reports to the CFO or finance director.

The CFO reports directly to the CEO or board of directors and has a higher level of authority in making company-wide decisions.

External Interaction

The controller mainly interacts with internal teams and staff, focusing on internal financial management and reporting.

The CFO regularly interacts with external stakeholders, such as investors, banks, and financial analysts, to discuss the company’s financial performance, raise capital, and manage relationships with external partners.

Controller vs. CFO Salary

When comparing the salaries of a controller and a CFO, there are a few things to consider, like company size, industry, location, and experience.

Controller Salary

According to ZipRecruiter, the average salary for controllers for the year 2024 is $119,497. Experienced controllers might earn up to $250,000, depending on their job duties and the size of the organization.

CFO Salary

CFOs typically earn an average of $446,622 in 2024. However, in larger companies or public firms, this can go well beyond that range. Some CFOs can make over $700,000, especially when bonuses and stock options are included.

Which Role is Right for Your Business?

For smaller businesses or startups, a controller may be sufficient to handle the financial reporting and daily operations. Controllers are excellent at maintaining the company’s financial accuracy and ensuring that the books are in order.

However, as your business grows, it may become necessary to bring in a CFO to oversee long-term financial planning and drive strategic decisions. CFOs are vital for navigating the complexities of financial growth, managing investments, and securing funding.

Why Controller and CFO Are Key to Your Business Success

Both the controller and CFO are important for managing a company’s finances, but their roles are different. The controller oversees daily financial operations, assuring accuracy and compliance. Meanwhile, the CFO makes big-picture financial decisions, guiding the company’s long-term growth and strategy.

As businesses grow, having a CFO becomes essential for managing complex financial decisions and securing funding. Understanding these differences helps companies make better choices about financial leadership, ensuring the right people are in place for both day-to-day tasks and future growth.