Three common roles in a company have the most influence over financial affairs and functions: the Certified Public Accountant, the Chief Financial Officer, and the Controller. Some might find it difficult to know the difference between a CFO and a Controller.
These positions could be one person or three distinct individuals.
- CPA is a professional designation
- CFO and Controller are job titles
CPAs, CFOs, and Controllers may be company employees or independent contractors.
What’s the Difference Between a CFO and a Controller?
A CFO is an executive job title for someone who oversees the internal financial management of the company. A Controller, on the otherhand, reports directly to the CFO as control of accounting within a company.
What Is a Chief Financial Officer (CFO)?
“Chief Financial Officer” is a job title within a company. Although the position requires a high degree of education, skill, and experience, CFO is not a professional designation. The CFO is a member of the top-level management of an organization, most likely an employee of the company, but CFO duties can be contracted out.
The CFO is primarily concerned with the internal financial management of the company. While duties vary widely depending on the size and needs of the company, in general, the CFO is responsible for the following:
- Monitoring the company’s financial strength.
- Company-wide financial planning, including coordinating the budget process between locations, departments, or products and services.
- Directing and approving asset and debt decisions (capital budgeting).
- Identifying the need for and coordinating with outside funding sources such as banks or investors.
- Coordinating with outside accountants performing attest functions for the company (i.e., CPAs)
The CFO may or not be a licensed CPA. They may hold a different professional designation, such as Certified Management Accountant (CMA). Depending on the organization, they may have also worked their way up through the ranks after usually earning a degree.
What Is a Controller?
“Controller” is another job title within a company that requires a high degree of education, skill, and experience. The business may also contract these duties out if necessary.
A controller is responsible for the direction and control of accounting within a company. They will typically report to the CFO or perform a CFO’s duties in the absence of that position. They may also be a CPA or former CPA or hold other professional designations.
A Controller’s duties will vary but may include:
- Designing or improving a company’s accounting system.
- Managing the accounting department and staff.
- Selecting, implementing, and managing the accounting software.
- Managing the accounting cycle (identifying, recording, and journalizing financial transactions).
- Closing the books.
- Preparing financial reports for management and outside users (such as the IRS).
- Designing and implementing a system of internal financial controls.
- Coordinating the budget process following CFO directives.
- Managing payroll.
- Human resources (in the absence of an HR department).
CFOs vs. Controllers
CFOs and Controllers are employees of companies that manage and perform the financial duties of a firm but vary in their specific job duties.
The roles of CPA and CFO/Controller can overlap if a CPA firm provides contract services to companies that can’t afford to pay a full-time employee. Growing companies often do this for cost-effectiveness.
Larger companies may have both CFO and Controller positions. In this case, the Controller reports to the CFO.Are you looking to learn more? Call us for a free consultation!