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Let’s start was 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.
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.
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.
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.
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 skillset 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.
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.
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.
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.
At TGG, we help small businesses get clear and accurate financial reporting as your outsourced partner. Our four-person teams come into your business to work with your existing team or serve as your entire accounting department and help your company thrive.
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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