Many people use the phrases CFO and Financial Controller interchangeably, and they are viewed as synonyms, however, there is a distinction between their positions in a corporation. Knowing the operations that come with their responsibilities helps to understand their differences. The distinction between a Chief Financial Officer and a Finance Controller will be discussed in this article.
Defining CFO and Finance Controller
CFO-
A CFO is indirectly involved in the finance department’s day-to-day operations. A CFO is responsible for economic planning and forecasting, including analyzing and comparing the company’s financial condition, making future predictions, and overseeing the capital structure.
Controller of Finance-
A Finance Controller is actively involved in the financial department’s day-to-day operations, monitoring debts and compliances, as well as providing information to external auditors and financial data for filing reasons.
What is the difference between a Chief Financial Officer and a Financial Controller?
The following table shows the differences between these two terms:
| CFO | Financial Controller |
| The financial plan is the primary focus. | The focus is mostly on tactical accounting. |
| A Chief Financial Officer (CFO) is a senior executive who is in charge of the company’s financial operations. | A finance controller is a senior professional who serves as the head of accounting and is responsible for the creation of financial reports such as balance sheets and other financial statements. |
| A CFO plans for the company’s future propels it ahead and advises stakeholders on crucial business choices. | A Finance Controller executes his job in such a way that it aids the accounting department’s day-to-day operations. |
| A CFO assists an organization’s strategic planning by detecting business risks and making important choices to address such risks. | A Finance Controller adopts methods to guarantee that the accounting operations of a corporation are sound. |
| A CFO, in collaboration with the CEO, generates new ideas, which are then presented to staff, and the outcomes are compared to the company’s objectives. | A finance controller churns up methods to improve the company’s profitability and examines the company’s costs. |
| Through his leadership qualities and skills, the CFO plays a crucial role in steering the organization in the appropriate financial path while also ensuring company-wide responsibility. | The finance controller devises effective and practical techniques for increasing profit margins and staff productivity. |
What does your Company Require?
If there is no finance controller on staff, the accounting department may miss out on some exciting chances. Similarly, without a CFO, the firm would be unable to make an accurate financial prediction in the future. As a consequence, both the CFO and the financial controller can assist the business in achieving its goals.
If you’re having trouble deciding if your organization needs a financial controller, a CFO, or both, keep this in mind:
If your business is expanding quickly and you want accounting records based on the GAA Principles, but your accountant is unable to keep up with all of the financial data, you will require the services of a finance controller.
However, if you require help making investment decisions and need financial predictions for your firm while going through a transformation, you may consider employing a Chief Financial Officer.
How Finance Controllers and CFO are Related to Each other?
The CFO and the Finance Controller work closely together, despite the fact that they are independent and each plays a critical part in making a corporation successful. Without the controller, the CFO may be unable to obtain reliable financial data necessary for decision-making. The CFO is responsible for the controller’s success since their analysis and plan are based on correct financials.
A CFO and financial controller work together to realize the CEO’s vision and move the company forward, despite their different duties. The controller should be well-versed in accounting, GAAP [1], and best practices, whereas the CFO should be well-versed in accounting, finance, and company strategy.
As a result, having a skilled controller may not be enough for some firms; they may additionally require the services of a CFO. Companies lost out on strategic and financial planning if they lack the experience of a qualified CFO.
Role of Virtual CFOs
The need of a CFO cannot be overstated, but many businesses cannot afford a full-time CFO; hence, the Virtual CFO is born. A virtual chief financial officer (VCFO) is an outsourced service provider who performs the same function. You simply have to pay for the services and time you receive. When choosing a VCFO, though, make sure they have appropriate expertise dealing with financial matters. Additionally, contact a few references to learn about their client’s experiences.
Conclusion
The necessity for a CFO and a financial controller is determined by your company’s or organization’s needs. As previously said, while they are distinct from one another, they all play an important part in the success of a firm. As a result, as an entrepreneur, you should be aware of the distinctions. Connect with FinAccountant for additional details you need.
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