CFO vs Controller

Difference between CFO vs Controller

CFO is the official abbreviation for Chief Finance Officer in a company and is usually ranked just below CEO (Chief Executive Officer). With the skills of a CFO, he or she not only control and manage everything related to finance in the company but are also prominent at managing the day to day business operations and product pricing, along with a sense of other activities such as marketing, advertising, human resources, etc.

The controller is more of a Chief Accountant, and this person reports to the CFO of a company. The controller’s duties involve managing the day-to-day finances of the business while coordinating the income and expenses. While some organizations combine or merge the two roles, a business with scale and size has a need for both the roles separately, as they serve dedicated functions.

Who is CFO? (Chief Finance Officer)

In terms of skillsets, a CFO’s skills may be the same as a Controller, but a CFO must be certainly involved with both, the business and the numbers from an early stage. A CFO needs to develop a deep understanding of the synchronization between numbers and business operations, so as to have a pulse of the functioning of all the departments and keep the entire structure of the business well-oiled and smoothly functioning.

The CFO reviews past financial reports and has the critical responsibility of managing the business’s various risks and yet growing in a targeted manner in the future. Some day-to-day activities of the CFO include the tasks of financial analysis, forecasting, finalizing financing, fund management, planning, implementing, strategizing, and coaching the rest of the finance team.

A person suitable for the role of CFO needs to be a great financial strategist and a data-backed critical thinker.

Who is the Controller?

As mentioned earlier, Controller is more like the Chief Accountant of the organization, and hence needs to have sound professional experience in the field of accounting and financial reporting. The controller is usually responsible for maintaining the accounting books in order and continuously evaluating past performance and deriving lessons that could assist in the future.

The entire accounting department reports to the Controller. He or she is responsible for assigning duties to every department within accounting, and hence responsible for accounting, budgeting, compliance, generating reports, ensuring accuracy in the reports, analyzing data, and giving these reports and models to the CFO for decision making.

Head to Head Comparison between CFO vs Controller (Infographics)

Below is the Top 5 Comparison between CFO vs Controller:

Key Differences between CFO vs Controller

While some large organizations may refer to the controller being the CFO, it may not exactly be true.

Example:

H&M India does not have any rank such as CFO. In H&M India, “Controller – India” reports to “Country Manager / CEO – India”. However, this structure is so because H&M is a Swedish company, and its planning and decision-making for the future course of business is set by the senior executive team that is located in Sweden. Hence, H&M has its CEO and CFO ranks based in Sweden, while each country will have a Country Manager (equivalent to CEO for that country) and Controller (equivalent to CFO for that country). This is so because, despite the decision-making powers that the Country Manager and Controller of a country might have, they have to be working within the defined broader guidelines set by the Senior Management in Sweden.

The key differences between the CFO vs Controller are as follows:

• CFO of an organization is ultimately responsible for anything and everything that has got to do with finance, and the position ranks just below the rank of CEO. Controller, on the other hand, reports directly to the Country Head in the case of MNCs or to the CFO of the organization and the position ranks 3 to 5 ranks below the rank of CEO.
• The main function of a CFO is to ensure that the future projections of cash flows and financial strategies and decisions taken are the most favorable ones for the company’s future growth. A controller is responsible for all accounting and finance operations on a day-to-day basis, which includes managing weekly, monthly, and quarterly reports, budgeting, and compliance management.
• The key roles that report to a CFO include controller, treasurer, and tax manager. Whereas, the key roles that report to a controller include an accounting manager, financial planning manager, accounts receivables manager, and accounts payable manager.

Comparison Table of CFO vs Controller

The table below summarizes the comparisons:

Conclusion

A CFO is ultimately responsible for anything to do with the finances of a company. However, since a single person cannot manage everything, there are further subdivisions within the finance department. One of the important sub-divisions is headed by the Controller, that manages the day-to-day financial operations of the business while allowing the CFO to manage the macro-level decisions for the future path of the business.

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