CFOs are often involved in mergers and acquisitions, financing deals, and other major financial decisions. They work closely with the executive team to provide financial guidance and support. CFOs have broader expertise, including financial analysis, strategic planning, risk management, and investor relations. They deeply understand the financial landscape and how it impacts the overall business strategy.

CAOs, on the other hand, simultaneously keep an eye on the past, present, and future. Like the controller, CAOs need to know the numbers inside and out, but CAOs are watching out for potential threats and opportunities that will impact the business. This is most clearly reflected in the CAO’s role in ESG reporting and risk management. Both the controller and CFO play vital roles in a company’s financial management. While the controller oversees the day-to-day accounting operations, the CFO is responsible for developing and implementing long-term financial strategies that align with the overall business objectives. They have the responsibility of producing financial statements that guide the movement of the company forward.

Controller vs. CFO: Key Differences

In May 2018, the BLS reported that 21% of chief executives (55,600) were self-employed workers or entrepreneurs. Another 11% (28,500) worked in professional, scientific, and technical services; 10% (26,400) in government; 7% in manufacturing (18,600); and another 7% in healthcare and social assistance (17,100). The BLS expects the job market for top executives to grow 6% between 2018 and 2028 but predicts the market for chief executives to fall 5% due to business consolidation. This is a newer trend that I think has really taken hold within the industry. Big companies have all these resources to be able to help them grow and expand and get information. We love the benefits of an outsourced finance and accounting solution as it starts leveling the playing field for smaller companies.

Since their role is to act as a trusted advisor to the CEO, President, and others on the management team, it’s important to choose someone with whom you can build a strong working relationship. Controller salaries vary depending on experience, the size and location of the company, and the complexity of the industry. Controllers at small companies (~$10MM in revenues) typically make $150,000 annually. Factor in variable compensation, benefits, and taxes, and you’re looking at a total cost of approximately $200,000 per year. On the other hand, middle-market companies can expect to spend closer to $300,000 per year all in. Making prudent financial decisions is about more than just knowing the present financial situation.

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In contrast, anyone aspiring to become a CFO should be able to demonstrate skillful oversight of finance professionals. They would be willing to step down to handle the https://quickbooks-payroll.org/ responsibilities of a controller when required. A great CFO will also possess great networking skills and will quickly be able to establish chemistry with the CEO.

• In contrast, anyone aspiring to become a CFO should be able to demonstrate skillful oversight of finance professionals.
• A financial controller is a mid-level manager in your financial department.
• If your business is still in the startup phase, it may not be generating enough income to justify the expense of hiring a CFO.
• Together with the team, they handle internal audits and prepare recurring or monthly finance reports such as income statements and balance sheets.
• Another way to bring the responsibilities of a controller to your team for financial success is by outsourcing the service.
• For a more detailed breakdown of salaries for CFOs and Controllers, check out our 2022 Total Compensation Guide.

The skill sets required for a controller vs. CFO are mutually supportive but distinct. Ideally, if both roles are present in a company, they’ll work together to complement and support one another as they move the company forward. Until your business earns those revenue levels, you can keep the two roles combined. If your business is very large with more than $1m in annual revenue, having a separate CFO will certainly pay off.

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Your controller will become your go-to person for accounting operations, business finances, payroll processing and bookkeeping tasks. Often, small business owners believe they can bypass the need for a controller position — However, a controller plays a crucial role in small businesses, especially for growing companies. CFOs, as data-driven decision-makers, manage and work with the financial divisions to ensure that the reports are delivered on time. By analyzing cash flow and financial statements, they can identify strengths and weaknesses to propose an action plan for future growth.

In fact, they may also evaluate and select the technology to be used for accounting or other related functions in the company. Discover how our speedy, simple, and cost-effective payment transfer automation solution can streamline your accounts payable and save you money on invoice and order payments. For a more detailed breakdown of salaries for CFOs and Controllers, check out our 2022 Total Controller vs CFO: 6 Key Differences to Understand Compensation Guide. It gives a total breakdown of salaries for these positions, bonuses, benefits, and other compensation that we think you will find useful. From a CFO perspective, they’re typically commanding anywhere from $250,000 to $350,000 base salary in mid-market companies. There comes a point in every small business owner’s life when their daily tasks become seemingly impossible.

How Do You Become a Financial Controller?

The board and management will look to the CFO to provide direction as circumstances change. Ideally, you should hire a CFO before rapid growth or company purchases complicate business operations. CFOs add value by planning for change, rather than reacting to change after the fact. The role of a CFO requires expertise in finance coupled with strong communication skills and effective leadership abilities. A good CFO must have strong leadership skills to effectively manage their team. They need to be able to delegate tasks appropriately while providing guidance when needed.

Controllers will even set strict guidelines or standards of operations to prevent the same problems from reoccurring. A controller will be necessary if your business is handling a high number of transactions. Their scopes of work include (but are not limited to) procurement, budget reporting, forecasting, strategic partnership, mergers, acquisitions, and capital funding. The role of a CFO is complex, and many CFOs work long hours in order to complete their duties. These professionals need the ability to focus, particularly when under pressure to meet deadlines. They may also have a Certified Management Accountant (CMA) certification along with their Certified in Strategy and Competitive Analysis (CSCA) certificate.