If you are also confused about whether you should hire a controller vs CFO; or both in your business, then this article will help you get the perfect answer to all your queries.
There is a well-said quote that goes, “You don’t build a business, you build people, and then people build the business”. The statement is more than just a saying but a fact. Without versatile, well-educated, and skilled employees, any business can not proceed ahead and fight the competition. If there is a lack of personnel, whether considered qualitative or quantitative, then the company can not grow. All the personnel or employees in any organization come together to work as different parts of a system to run the machine i. e. the business.
The controller and CFO are the parts of this machine or personnel in any business. At times businesses wonder what is the difference between CFO and a controller, does my business need a controller or a CFO, and many more.
Before we answer all of your questions, firstly take a minute to take pride in yourself that your hard work has brought your business to a level where you are forced to ask all these questions. Kudos to you for such a great achievement.
Secondly, your asking these questions suggests that with the increased growth of the business, you have been facing some problems in conducting and managing the accounts of your business, which is quite common as the scale, recording requirements, and management of the accounts have increased with the growth.
Well, with this blog, we have brought the solutions or answers to all your queries in a single place. Here, you will know everything from controller vs CFO to their requirements in a business and much more. So, let’s proceed.
Controller vs CFO: The Definition and Job Description
Before proceeding to the business’s hiring requirements of a controller vs a CFO, allow us to explain a bit about the duo and their job description or requirements for any business.
What is a Controller and What Does a Controller Do?
Let’s start this comparison of controller vs CFO with the definition of the controller. A controller is a senior member of the accounting department of any business. He acts as the HOD of the accounting department and thus takes care of developing the financial reports of the business. Additionally, he is also the specter of the accountants and bookkeepers.
Some businesses also take the help of the controller for auditing, budgeting, internal control, etc. If required, the controller will also be responsible for selecting the level and type of technology used in any business for financial purposes.
What is a CFO and What Does A CFO Do?
A CFO or a Chief Financial Officer is a senior-level executive for any business whose responsibility is to manage the financial requirements and actions of any organization. The CFO is obliged to take care of higher-level requirements of the business like cash flow management, planning of finance, etc. a CFO may also be responsible for analyzing the weakness(s) and strength(s) of an organization and using the same for the greater good of the business.
At times, a CFO may also be obliged to ensure that the recording and development of the financial reports are accurate and scheduled.
From the definition of the two employees, the difference between a CFO and a controller may not be clear.
To sum up, we can say that as for the controller, his tasks are limited to management and reporting only, while the CFO has to take care of financing and fundraising in any organization.
For a deeper insight into controller vs CFO, let’s have a look at the section that describes when you need to hire a controller and when a CFO.
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When Should I Hire a Controller for My Business?
You must have gotten an idea about what does a controller do, but for a business, you need to hire a controller if you need someone to take care of one or more of the below-provided tasks:
1. Managing Accounts and Supervision
If your business needs someone who can control and manage the acts of a bookkeeper and check the sanctity of the accounts prepared, then you should hire a controller.
2. Scheduled and Accurate Reporting
If your bookkeeping personnel is overwhelmed with the recording of the operations then you may need a controller to devise accurate and scheduled reporting that meets the requirements of the business.
3. Establish Internal Control
You can also hire a controller if you need someone to ensure that your accounts and reports are accurate and error-free.
4. Auditing and Tax Support
If your business’s audit is near then you can hire a controller to conduct the internal audit and help the company with tax support and other similar requirements as directed
5. Defining the Accounting
Different businesses use different methods and technologies for accounting and reporting. At times, a controller may also assign the task to take care of defining the accounting techniques and technologies to use in a business.
When Should I Hire a CFO for My Business?
It may be clear from the previous section that the controller is devotee to taking care of intermediate-level tasks of the business. The difference between a CFO and a controller can be even more clear once you get a hang of the requirements of a business. Now that you know what is a CFO, let’s understand when your business may require to hire a CFO.
1. Superior Reporting Requirements
If your business needs a superior form of reporting, then you may hire a CFO to meet such requirements. Such reports are to be present in front of investors, tax authorities, board of directors, members, and other similar individuals related to the business.
2. Controlling and Monitoring the Finance Department
If your finance team is diverse, then you may need to hire a competent CFO who can supervise the tasks and performance of the finance department as required.
3. Fundraising
As a company, you may need your CFO to prepare a pitch to impress the investors and other members to invest more in the business. This reporting, as informed earlier, should be more extensive, sleekier, and better than that normally presented by a controller.
4. Financial Decisions and Control
Another one of the reasons that you need to hire a CFO is when the business requires you to take some thought financial decisions that the owners and members do not have enough knowledge about the same.
To get more information about the difference between a CFO and a controller, let’s have a look at their pay scale.
Controller vs CFO: The Salary
The pay scales of controller vs CFO are quite different. The CFO, being the higher level employee, generally gets more compensation for his services, as compared to that of the controller. The average annual salary of a CFO ranges between $190,000 and $280,000. This figure depends upon the size of the organization, the industry, the location of the business, etc.
Similarly, the average annual pay of the controller ranges between $50,000 to $135,000. This figure depends upon the size of the organization, the industry, the location of the business, etc.
Controller vs CFO: The Conclusion
As you must have understood from the previous sections, the need to hire a controller vs CFO depends upon the requirements of the business. If the business needs to take care of extensive and complicate tasks related to higher-level financial management, the CFO is well-suite for the job. However, if the job has limits to a narrower scope of reporting and supervision only then you can do well with a controller by your side.
A company may need to hire both a controller and a CFO in the business if the scale of the business is big and the demand of the industry.
If you are still confuse about hiring a controller vs CFO, then we can help you make this decision. Connect with the experts at The Ledger Labs and allow us to help you figure out the exact difference between a CFO and a controller. Additionally, we offer both Controller Services and CFO Services to those interested. That as well on nominal and industry competitive prices. Outsource your tasks to the smart and intelligent controllers and CFOs at the Ledger Labs and live worry-free.
