Fractional CFO vs Fractional Controller: What’s the Difference?

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.

CFO vs Controller

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.

Chief financial officer checking data in annual report

Should I hire a fractional 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 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.

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.

Financial Controller with a checklist

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.

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.

Fractional CFO vs Fractional Controller: How TGG Can Help

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.

Frequently Asked Question About Fractional CFO vs Controller

When comparing a CFO vs Controller, a CFO holds a higher position than a Controller. The CFO is responsible for the company’s entire financial strategy, while the Controller focuses more on managing day-to-day accounting operations.

 

CFOs typically earn more than Controllers because they have broader responsibilities. While the average salary for a Controller in the U.S. ranges from $100,000 to $150,000, CFOs can earn anywhere from $150,000 to over $400,000, depending on the company’s size and location.

In most organizations, the Controller reports directly to the CFO. The CFO uses the financial data and reports provided by the Controller to make strategic decisions for the company.

The CFO is the next step above the Controller in most organizations. In some companies, other senior roles like the VP of Finance or Chief Accounting Officer (CAO) can also rank higher than the Controller.

A fractional CFO provides CFO-level services on a part-time or project basis, often helping small businesses with financial strategy, budgeting, and forecasting without the cost of hiring a full-time executive.

The key difference is the commitment level. A fractional CFO works part-time, providing services as needed, whereas a full-time CFO is dedicated to the organization on a full-time basis, overseeing all financial activities daily.

Yes, companies can benefit from having both. The Controller handles internal accounting and compliance, while the fractional CFO focuses on strategy, fundraising, and long-term financial planning.

While a fractional CFO can cover some accounting tasks, a Controller is still valuable for maintaining accurate financial records and managing reporting processes. Together, they ensure smooth financial operations and strategy alignment.

For startups focusing on rapid growth, a fractional CFO may be more beneficial initially as they provide strategic financial guidance. However, as the company grows, hiring a controller to manage internal accounting becomes increasingly important.

The Controller supports the CFO by managing financial reporting, compliance, and day-to-day accounting activities. This allows the CFO to focus more on strategy, fundraising, and high-level decision-making.

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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