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Let’s start with defining the word, ‘fractional.’ Fractional is defined as part-time and in this circumstance, the fractional CFO and/or fractional Controller working for you is doing so on a part-time or contracted basis. While it may sound like a fractional CFO and a Controller have very similar job responsibilities and you only need to choose one for your business, that isn’t necessarily the case.
What is a fractional CFO’s job responsibility?
The most important job responsibility of a CFO is to drive revenue and profitability. They provide insight, guidance, support, financial foresight, industry expertise, and friendship to clients. The most important thing is for an outsourced or fractional CFO to build trust with the business owner(s). To do so, they provide strategic advisory to create that trusting relationship.
What is a fractional Controller’s job responsibility?
A fractional Controller is responsible for ensuring the accuracy of the financial statements, interpreting the results, and communicating them (we call it “telling the story”) in a manner that management, non-accountants, and you can understand. They also suggest business improvements that help achieve your goals for the business. At TGG, the Controller is the Client Lead and Project Manager for the client engagement to help manage both the TGG and internal (client employee) teams.
What does a fractional CFO do compared to a fractional Controller?
You may be unsure of the differences between these varying roles on your accounting team. For example, Controllers and CFOs hold similar roles with a few key differences. As your business continues to grow, the ability to produce accurate, efficient financial statements will be increasingly essential to your success.
A fractional CFO is mainly responsible for managing the financial actions of your company. This includes cash flow management, financial planning, and analyzing where a company’s financials are strong and where they are vulnerable. On the other hand, an outsourced or fractional Controller is the head of accounting and oversees the preparation of balance sheets, income statements, and other financial reports. They also perform compliance audits, run the internal controls, assist the budgeting process, and analyze your companies’ financial data. Some companies also give their Controllers the responsibility of evaluating and selecting the technology used in finance departments.
There is a lot of overlap between these two roles and they both work very closely together, but the major difference is that the CFO’s job is much more strategic and uses the data from the financial statements to guide their decision making. The Controller is responsible for ensuring the financials are telling the right story so the CFO can correctly guide you and take your business to the next level.
Can a Controller Become a CFO?
Yes, a Controller can become a CFO. However, it’s essential to understand the difference between a CFO vs Controller and the duties each position entails. While both roles deal with financial management, their responsibilities vary drastically.
Controllers are responsible for managing a company’s financial reports and overseeing internal financial controls. In contrast, CFOs have a broader scope, including managing the company’s financial strategy and analyzing financial data to make informed decisions.
While the Controller versus CFO debate continues, becoming a CFO requires a broader skill set than a Controller. A Controller must develop additional skills and expertise to succeed in a CFO position, such as business strategy, leadership, and financial planning.
What to Look for When Hiring a CFO or Controller
When hiring for a CFO or Controller position, you must look for candidates with the necessary experience and skills to thrive in the designated position, leading to a functional accounting department structure. Candidates should have a proven track record of success, strong communication, leadership, and analytical skills.
For CFO candidates, prioritize those with experience managing finances for a company of similar size and complexity to yours. Look for Controllers who are proficient in accounting software and have experience with internal controls and financial reporting.
In either role, it’s crucial to find someone who aligns with your company’s culture and values. Ultimately, hiring a CFO vs Controller is about finding the right candidate for your company’s specific needs.
Understanding the duties of CFO and Controller can guide your decision, but your primary goal should be to find someone who aligns with your company and brings knowledge and experience to the table. If you’re deciding between hiring a Controller vs CFO, consider consulting with an expert who can determine which would be the best fit for your company.
Should I hire a fractional CFO, fractional Controller, or both?
When building a robust accounting team, you may have questions regarding who to hire and whether to outsource talent instead of hiring internally. You may need a Controller if you require the supervision of a bookkeeper or your internal accounting team. By hiring a Controller, you will also ensure accuracy in your financial reporting, assistance in the financial close process, risk mitigation, etc. A CFO will help your company if you need additional guidance and supervision of your finance team or if you need a more sophisticated reporting and analysis system, assistance with stakeholder reporting and better report package generation, or assistance with fundraising. Regardless of what stage your business is in and what your goals are, you can greatly benefit from having a CFO and Controller on your team. All our clients are assigned a CFO, Controller, Accounting Manager and Staff Accountant to ensure that the accounting work is being done at the appropriate levels. For example, your Controller should not be doing any data entry or bank reconciliations. Those tasks would be done at the Staff Accountant or lower accounting level so the Controller can focus on telling the story of your financials.
Why choose a fractional CFO or fractional Controller over a full-time hire?
Hiring a full-time CFO or Controller can be costly, especially for small to mid-sized businesses. A fractional CFO or Controller provides the same level of expertise but on a part-time or project basis, saving you money while meeting your financial needs. Fractional CFO services and fractional Controller services offer flexibility, allowing businesses to scale up or down as needed, whether you’re managing rapid growth, addressing seasonal fluctuations, or navigating uncertain economic conditions. Instead of committing to a permanent hire with a significant salary and benefits package, you can tap into experienced professionals who bring industry-specific expertise without the long-term financial burden.
Should I Outsource a CFO or Controller Role?
Outsourcing a CFO or Controller role can be extremely beneficial for businesses. If you’re struggling to decide whether to hire a CFO vs Controller or Accounting Manager vs Controller, outsourcing can help you hire both roles while also gaining valuable advice as to which roles may be most beneficial for your individual company.
A company could outsource the Controller role to manage their day-to-day accounting operations, while working with an outsourced CFO to develop and execute their financial strategy.
Outsourcing these roles provides flexibility, allowing businesses to scale up or down as needed. Companies eliminate the need for in-house training and development by opting to outsource these roles, saving both time and money.
Questions to Ask When Hiring a Fractional CFO or Fractional Controller
Choosing the right fractional CFO or Controller for your business is critical. Here are some key questions to guide your decision:
- Experience: Have you worked with companies of a similar size and industry before?
- Services Offered: What specific tasks or responsibilities will you take on in this role?
- Communication Style: How do you communicate financial insights to non-accountants?
- Software Expertise: Are you familiar with the accounting or financial tools my company uses?
- Scalability: How can you adapt your services as my business grows or my needs change?
- Past Successes: Can you share examples of how you’ve helped businesses improve financial performance?
- Availability: What does your schedule look like, and how quickly can you respond to urgent matters?
Asking these questions will help you find a fractional financial Controller who aligns with your business’s goals and culture. A good hire will not only bring technical expertise but also a collaborative approach that fits your team.
Fractional Controller Services
Fractional Controller Services provide businesses with access to experienced financial professionals on a part-time or project basis. These services typically include preparing and analyzing financial statements, managing month-end and year-end closing processes, budgeting, forecasting, and cash flow management. A fractional Controller also oversees accounting operations such as accounts payable, accounts receivable, and payroll, ensuring compliance with financial regulations. In addition to routine financial management, a fractional Controller offers strategic insights by identifying cost-saving opportunities, improving internal processes, and assisting with financial planning.
Companies benefit from fractional Controller Services by gaining high-level financial expertise without the expense of hiring a full-time controller, making them a flexible and cost-efficient solution for growing businesses.
Why Choose Fractional Controller Services?
Choosing fractional Controller services allows businesses to access expert financial management without the cost of a full-time hire. This flexible solution ensures accurate financial reporting, better budgeting, and cash flow control, helping businesses stay organized and prepared for growth. Companies also benefit from strategic advice on improving profitability and streamlining processes, all while paying only for the time and services they need. It’s an efficient way to gain high-level support, especially for small to mid-sized businesses looking to scale.
Fractional CFO Services
Fractional CFO Services provide businesses with access to experienced financial professionals on a part-time or project basis. These services typically focus on managing the financial strategy of the business, improving profitability, and creating long-term growth plans. Compared to fractional Controller jobs, a fractional CFO is responsible for overseeing strategic financial planning and ensuring the company has effective cash flow management. They analyze financial performance, develop budgets and forecasts, and offer insights that guide strategic decision-making.
In addition to overseeing the company’s financial strategy, a fractional CFO prepares reports for stakeholders, including investors and boards of directors, helping to build confidence in the company’s financial health. They also assist with raising capital, from preparing financial projections to managing investor relations, and ensure potential risks are identified and mitigated. By providing a high level of expertise, a fractional CFO offers strategic leadership that supports the company’s goals and ensures its financial stability.
Why Choose Fractional CFO Services?
Choosing fractional CFO services allows businesses to access high-level financial leadership without the cost of a full-time hire. This flexible solution helps businesses create and implement financial strategies, manage cash flow, and plan for the future while only paying for the time and expertise they need. It’s an efficient way to gain executive-level financial guidance, especially for small to mid-sized businesses navigating growth or complex challenges.
Key Takeaways: Fractional CFO vs Controller
- Fractional CFOs focus on strategy, while fractional Controllers manage financial accuracy. CFOs handle financial planning, cash flow, and business strategy, while Controllers ensure precise financial reporting and interpret results.
- CFOs and Controllers complement each other. Having both roles allows the Controller to manage day-to-day accounting while the CFO focuses on strategic decisions for growth.
- Outsourcing provides flexibility and cost savings. Businesses can access high-level expertise without the expense of full-time hires, scaling financial support as needed.
Frequently Asked Question About Fractional CFO vs Controller
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This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
