Difference Between CFO and Controller

CFO vs Controller

There were times when companies were not as big as they are today and thus could manage without a plethora of posts that are commonly seen in a big corporation today. Two commonly encountered posts are CFO and Controller that are very confusing at least to an outsider because of similarities in nature, roles and responsibilities of the two posts. However, there are many differences that will be obvious after going through this article.

When a business is growing fast, need is felt for a controller and managing the finances of the company becomes a strenuous and stressful exercise. A Controller is a financial manager who despite his high salary is an asset for the company because of his expertise with the latest financial systems and software that help to keep cost down. In fact, a good controller can often pay for himself through cost cuts that he introduces in the company. He is the person who manages cash flow with efficiency and ease. A Controller knows all about book keeping and he can easily supervise book keeping staff. He is adept at creating weekly or monthly financial reports as per the requirements of the business. He not only knows software that is best for the organization, he also maintains it efficiently. An experienced Controller can even take major cash flow decisions.

However, there is a post that is even superior to a Controller and that is CFO. When the size of business has grown too much, it is always prudent to have a specialized CFO. A CFO has the qualifications to efficiently handle all that a Controller does in an organization. He can, on the basis of his knowledge and expertise, negotiate complex situations of debt and equity financing. He is also an expert in managing good relations with banks and other financial institutions.

If you have got a Controller who is performing satisfactorily and even taking up challenges that are beyond the scope of his responsibilities, you probably do not need a CFO. However, if it is proving too much for your Controller, you can either go for a part time CFO or you can replace your controller with a full fledged CFO. While a Controller is not truly a part of the management, a CFO is second only to the CEO and completely controls the finance department.