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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 close together, but the major difference is that it’s the CFO’s job is much more strategic and using 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.
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.
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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