Core CFO responsibilities plus nifty CFO secret weapons

Are CFOs not Controllers?

Don’t they do the same thing? No and no. Often used interchangeably, usually incorrectly, let us guide you through what each contributes to a business. You might need to sit down for this. A pit stop for enlightenment, if you will.

Typically Controllers lean towards more tactical responsibilities such as data quality and compliance, as well as reviewing and completing regulatory filings. They focus on ensuring all accounting principles and policies are being followed, that books are closed on time, and that year ends are closed up and filed accurately (internally and externally). Imagine the Controller like a pilot, navigating you from one year-end to the next, safely and on time, through accurate reporting, monitoring internal controls, and adhering to regulations.

So the CFO has more of a strategic role?

The CFO on the other hand has more of a strategic role, specifically in four major areas; regulatory compliance and communication of results to external stakeholders, financial operations, strategic leadership and project management. Where the controller generally focuses on accurate financial reporting, a CFO will be more involved in strategic planning, forecasting, projections, implementation and recommendations for the overall organisation.

Think of the CFO as the Air Traffic Controller; they take information from multiple sources, i.e. the pilot, weather etc., and this enables them to issue instructions about the flow of air traffic. In terms of business, the accurate data provided by the controller, treasurer, et al, equips the CFO and CEO to make future decisions that will help the business grow and manage risk down the line.

And this segways nicely into the role of the CFO in tandem with the CEO, and other areas within the organisation. The CFO is the right hand person to the CEO and supports important decision making as we mentioned before, especially with strategy, scenario analysis, and research. Additionally, they work cross functionally on projects that support the overall organisation, be it on pricing, systems, processes, HR planning, capital projects, etc.

Small businesses have often mentioned their confusion about the role of tax advisory services, erroneously interpreting ‘advisory’ to include business support rather than just tax consulting. Usually a CFO is experienced in accounting, financial reporting and business operations en masse, and generally, tax accountants are not.

Do I need a CFO?

There’s no hard and fast rule but for most start ups, a fractional CFO is a good idea for a number of reasons. Not only can they save you money and help you head into revenue faster, they can also help you make key decisions that impact your business long term. Once you’ve outgrown each other, you can look at hiring a full time CFO. A Controller will not provide the same value; some CFOs will manage the controllership duties until that role grows and are perfectly capable with the support of a senior accountant. However, it’s vital that you trust your CFO and are willing to follow their recommendations, not ignore their advice.

So go forth, secure in the knowledge of what you need within your business in terms of a Controller or a CFO. They’re quite different when you break it down. I read somewhere that controllers “put the numbers together in black and white, then the CFO comes in and adds some colour”. Take from that what you will!

Curious to know more, perhaps we missed something? Reach out to us at info@entreflow.com today. We’d love to chat.