Fractional means 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.
The fractional CFO vs. Controller decision usually comes down to whether your business needs stronger strategic financial leadership, stronger accounting oversight, or both. A CFO primarily uses financial information to guide planning and higher-level decisions, while a Controller focuses on the accuracy, reporting, and management of the accounting function.
WHAT DOES EACH ROLE ACTUALLY OWN?
If you are asking what is a fractional CFO, the role is part-time or contracted financial leadership focused on strategy, planning and decision support.
A CFO focuses on financial strategy, planning, and decisions that can improve profitability and support growth. They provide insight, guidance, support, financial foresight, and industry expertise to business owners, and leadership. An effective outsourced or fractional CFO also needs to build trust with the business owner(s).
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. 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 strategic financial direction 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 support audit preparation, oversee internal controls, assist the budgeting process, and analyze your company’s financial data. Some companies also give their Controllers the responsibility of evaluating and selecting the technology used in finance departments.
WHEN DOES A BUSINESS NEED A CFO, 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 add oversight around accuracy in your financial reporting, assistance in the financial close process, risk mitigation, etc. A CFO can help if you need additional guidance and supervision for your finance team, a more sophisticated reporting and analysis system, support with stakeholder reporting and better report package generation, or help with fundraising.
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.
Some businesses need Controller-level accounting oversight before they need ongoing CFO support, while others may need both roles at the same time. The right structure depends on the complexity of the accounting function, the quality of existing reporting, and the financial decisions leadership needs to make.
WHEN DOES FRACTIONAL SUPPORT MAKE MORE SENSE THAN 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 access to experienced financial leadership on a part-time or project basis, without automatically committing to a full-time position while still 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.
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.
It can also reduce some of the recruiting, training, and management demands associated with adding full-time financial leadership internally.
WHAT SHOULD YOU ASK BEFORE HIRING EITHER ROLE?
When hiring for a fractional CFO vs. Controller, look for candidates with the experience and skills required for the work you need them to own. CFO candidates should have experience managing financial decisions for companies with similar size and complexity, while Controllers should have strong accounting, reporting, systems, and internal control experience.
In either role, look for strong communication, analytical, and leadership skills, along with someone who can work effectively with your existing team. The right hire should match both your financial needs and the way your company operates.
Choosing a fractional CFO vs. 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.
FAQS ABOUT FRACTIONAL CFO vs. CONTROLLER
Sources:
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.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
Read More >>>
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.”