Do I Need a CFO or a Controller?
If you’re founder or CEO of a small business, you may be trying to build up your finance function and it’s difficult to know where to start. We are often asked “do I need a CFO or a Controller?” or “do I need a VP of Finance or a CFO?”. It’s important to understand the different roles in a finance organization so that you are sure you’re getting the right skillsets on the team now, and setting up the structure for growth later.
CFO vs Controller Duties
CFO duties, briefly:
- Strategic planning
- Board/investor relations
- Goal setting and KPI development
- Budgeting and forecasting
- Corporate development, going public, M&A
Strategic. Plan for the future, set financial strategy, enroll the stakeholders
Controller duties:
- Internal controls
- Expense management and approvals processes
- Accounting process and policy development
- Preparation of financial statements for board or management use
- Drill down reporting and analysis
- Audit process management
- Compliance and filings
Tactical. make sure the books are accurate, protect against bad actors and stay in compliance
So Which do I Need in a Startup or Small Business?
The simple answer here is that you should hire according to the outcomes you want for your business. If you intend to work with investors, go public, raise funds, etc., you will need a CFO. If not, you can probably hire a controller. In reality many controllers will go on to be CFOs, and many CFOs were once controllers. There is a lot of overlap in skills so in a small business or startup you can get away with just one of these roles for quite some time, particularly if you use a fractional CFO. It’s important to know that an experienced CFO will know what’s needed of a controller, but a controller may not know what’s needed of a CFO.
CFO vs Controller Salary
The other aspect of your decision to hire a CFO or a Controller may be the salary cost. CFO can be expensive: $175k to $350k is expected. Controller salaries may be in the range of $100k to $130k per year. If you think you need a CFO but cannot afford the salary of a CFO, then a fractional CFO is the best option.
CFO vs Director of Finance or VP of Finance
You may be wondering about other titles. Are Director of Finance and VP Finance positions doing the same thing as a CFO in a small company? The roles take on many of the same duties as the CFO just not at as senior a level, and without as much experience. Certainly someone who is a Director or VP of Finance is on track to becoming a CFO, and will usually perform best and advance in their career if they have a strong CFO mentor. As such, these roles are usually found in larger organizations. You might also consider CFO services
Hiring Conclusions for Small Companies
In summary, if you’re hiring your first senior finance role:
- Do not hire a Controller expecting a CFO
- Hire a CFO only if you need one
- Hire a VP or Director only if you have a great CFO mentor
- Use a fractional CFO service to fill in the experience gaps your salary budget can’t fill full time
Author: Helina Patience, Founder, CPA, CMA, BA (Hons), BEd
Helina is a CPA, CMA with over fifteen years of experience in finance & HR within multinational companies, across many industries. Also the CEO of entreflow consulting group where I help small to medium-sized businesses get organized, grow, and crush their goals. I hold vast global experience after living and working in Australia, India, the UK and Ireland. Connect on LinkedIn.
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