A company’s financial operations encompass disparate activities, including accounts payable and receivable, tax and regulatory compliance, payroll, investment management, and more. Given the complexity, even finance professionals may struggle to understand how leadership within their department divides its responsibilities. This is especially true when it comes to distinguishing the roles of the chief financial officer (CFO) and the controller.
It’s often assumed a controller and a CFO are two sides of the same coin, but each role is distinct and critical to a company’s financial health. Though the two roles collaborate closely to efficiently manage and align financial operations to the company’s strategic objectives, they each serve specific functions in an organization’s hierarchy.
Key takeaways
- While CFOs and controllers are both important leaders within and beyond the finance department, they have distinct responsibilities and areas of expertise.
- CFOs are responsible for driving financial and business strategy alongside the CEO. Controllers are tactical finance operations leaders whose job is to enable the strategy set by the C-suite.
- Championing digital transformation and automation in the finance function will enable CFOs and controllers to be more effective leaders as their organizations grow and evolve.
An overview of CFOs and controllers
Although CFOs and controllers work in tandem to ensure the financial health and alignment of the company’s financial mechanisms, their responsibilities are clearly delineated. Let’s take a closer look.
What is a CFO?
A CFO, or chief financial officer, is a senior executive responsible for overseeing the financial activities of the entire organization. As members of the C-suite, CFOs work closely with CEOs to develop a financial strategy that aligns with an organization’s overall business strategy and goals. The CFO raises capital, manages relationships with investors and stakeholders, and ensures the company’s financial stability and growth.
However, being a strategic financial decision-maker is only one aspect of the job. A CFO is also a visible leader in the eyes of both staff and external stakeholders, serving as the face of the company alongside the CEO. The most successful CFOs are effective communicators who can inspire confidence among employees, investors, and the broader market.
What is a controller?
A company’s financial controller is often seen as the CFO’s right hand. They report to the CFO and are primarily focused on the day-to-day management of the company’s accounting operations. Their job is to implement the CFO’s strategy and vision for company growth while ensuring internal operations run seamlessly and to budget.
It’s a big responsibility. A controller is accountable for accurate financial reporting, budget management, and regulatory compliance. As a result, they need to know their company’s internal controls and protocols, tax obligations, and bank covenants from top to bottom.
But a controller’s role extends beyond managing the books. They must also ensure that financial policies and procedures are effectively integrated across the entire organization. This requires close collaboration with department heads, particularly those in IT, sales, and operations.
4 key differences between CFOs and controllers
Their positions on the org chart aren’t the only difference between CFOs and controllers. While it’s true there can be some overlap between the positions at smaller companies, CFOs and controllers traditionally have different backgrounds and areas of expertise.
1. Role and job function
A controller’s job is to ensure that financial records and accounts are always accurate and up to date. The role is focused on the tactical steps required to ensure the organization fulfills its financial obligations and meets KPIs. On the other hand, CFOs focus on the company’s growth strategy. They use data and reports supplied by the controller to evaluate the company’s financial health and work with other executives to shape the company’s strategic direction.
2. Responsibilities
CFOs hold a higher degree of responsibility than controllers. CFOs oversee the controller’s work and are directly accountable to a company’s board for meeting growth goals and making strategic decisions about their organization’s financial future. Meanwhile, controllers have oversight over day-to-day financial operations.
3. Expertise and expectations
CFOs have broader expertise and a wider purview than controllers. As C-suite leaders, CFOs often have a strong finance or business administration background and a deep understanding of financial markets, capital investment, and strategic growth opportunities.
Controllers are typically accountants with expertise in financial management operations, including bookkeeping, financial reconciliation, and reporting accuracy. Controllers often move up the ranks to become CFOs, but doing so requires broadening their skill sets to include more general business and leadership capabilities. To get there, many choose to pursue an MBA.
4. Approach and leadership
While CFOs and controllers aim to ensure their companies’ financial health, their approaches and leadership styles reflect their distinct roles. A CFO takes a strategic approach to financial management, leading through vision and influence to drive the company toward its financial and business objectives. In addition to leading the finance department, CFOs are key figures on the organization’s executive team. By contrast, a controller focuses solely on the accounting and finance functions. With precise attention to accuracy, compliance, and internal control, controllers lead through operational excellence and attention to detail.
| CFO | Controller | |
| Role | Financial executive oversight and strategic decision-making | Strategy execution and enablement |
| Responsibilities | Overall financial strategy and goal-setting | Day-to-day financial operations |
| Expertise | Business administration, finance, investments, strategic growth | Accounting operations, tax code, regulatory compliance, internal controls |
| Leadership approach | Visionary | Tactical |
Successful controllers and CFOs
Controllers and CFOs each have a role in ensuring their organizations’ future success and financial resilience. This includes adapting strategies and processes as business needs evolve to meet new market challenges and circumstances.
For many finance leaders, that means championing digital transformation within the finance and accounting departments. Nearly 3/4 of global CFOs say the digitization of the finance function is a high priority, citing enhanced data-driven decision-making and cost savings as key drivers. However, far fewer CFOs have made significant headway due to difficulties in overhauling entrenched finance processes. Notably, only 29% of CFOs say they have made meaningful investments in learning about autonomous finance technologies.
A finance leader doesn’t need to overhaul their entire finance operation at once. Introducing finance automation in strategic functions enables CFOs and controllers to achieve quick wins while paving the way for digital transformation in other areas.
Accounts payable (AP) is finance professionals’ top digitization priority for the third year in a row, according to research from MineralTree’s 8th annual State of AP Report—and for good reason. Aside from enabling accurate, on-time payments, AP automation solutions equip finance leaders with real-time visibility into cash flow and working capital. For CFOs in particular, access to this information is critical for setting successful short- and long-term financial strategies and tracking progress toward goals.
When to hire a controller, a CFO, or both in the age of AP automation
If you’re unsure when to hire a controller, CFO, or both for your organization, we break it down in this section.
When to hire a controller
The role of a controller is increasingly important for organizations that use AP automation to streamline their financial processes. Below are some key ways hiring a controller can be beneficial for your organization.
- Manage automated processes: With AP automation, your organization may experience a higher volume of automated financial transactions. A controller can effectively manage and oversee the automated processes, ensuring accuracy and compliance.
- Improve reporting efficiency: AP automation can significantly improve financial reporting efficiency by reducing manual data entry and human error. A controller can use these automated systems to enhance reporting accuracy and timelines.
- Optimize internal controls: AP automation solutions often come with built-in internal controls and fraud detection mechanisms. A controller can work alongside these automated tools to strengthen internal controls and reduce financial risks.
- Use data for decision-making: AP automation generates large amounts of data that can provide valuable insight into spending patterns, vendor relationships, and cash flow. A controller can use this information to make informed financial decisions for the organization.
Every company’s timing for hiring a controller is different, but many need at least a part-time controller once they reach $1 million in revenue. At this stage, it becomes necessary to produce audited financial statements for investors and ensure adherence to revenue recognition principles. For startups seeking seed or Series A funding, a financial controller can be instrumental in building investor confidence in the company’s financial health and management capabilities.
When to hire a CFO
While AP automation streamlines operational efficiency, a CFO’s strategic guidance becomes essential for leveraging automation’s full potential. Below are key ways hiring a CFO can benefit your organization.
- Strategic use of technology: A CFO can oversee the strategic implementation of AP automation tools, ensuring they align with the organization’s overall financial strategy and objectives.
- Optimize working capital: AP automation can accelerate invoice processing and improve cash flow visibility. A CFO can use these capabilities to make data-driven business decisions that maximize working capital efficiency.
- Risk management and compliance: AP automation reduces the risk of human error and fraud but requires robust risk management protocols. A CFO can develop and implement risk management strategies that align with AP automation practices and regulatory requirements.
- Drive financial strategy: With AP automation providing real-time financial data, a CFO can focus on driving strategic financial planning, capital allocation, and investment decisions that support business growth.
As startups grow, adding a CFO becomes necessary to guide investment decisions and develop financial strategies aligning with the company’s objectives, whether a Series C, D, or subsequent funding round or an initial public offering (IPO). The CFO’s role in fostering relationships with investors, banks, and other financial partners is critical for securing the necessary capital and resources for sustained growth. Moreover, a CFO’s expertise in financial management and strategic planning becomes indispensable in navigating the complexities of larger operational scales.
When to hire both a financial controller and CFO
There’s value in hiring both a controller and a CFO to capitalize on the benefits of AP automation fully. A controller can manage automated processes and data daily, while a CFO provides strategic oversight, financial leadership, and alignment with automation-driven decisions. For companies focused on growth, filling the controller and CFO roles provides a more robust financial infrastructure capable of supporting expansion and compliance in an efficient manner.
Evaluating your organization’s AP automation capabilities will help determine whether hiring a controller, a CFO, or both is the right approach to optimizing AP automation for financial success.
Final thoughts
MineralTree’s 8th annual State of AP Report found that nearly 90% of finance leaders say end-to-end automation delivers increased efficiencies, enabling them to do more with less in a challenging economic climate.
It makes sense: Both CFOs and controllers benefit from streamlined operations that enable them to deliver more value for their organizations. CFOs gain deeper insights into financial data, which supports better forecasting and budgeting. This makes it easier to answer tough questions from higher executives and board members while inspiring confidence in their strategic plans.
Likewise, automation gives controllers less to worry about when it comes to compliance risk and cost management. It enables them to scale their departmental operations effectively as their companies grow without adding resources or incurring new operating costs.
The bottom line: AP automation makes sense no matter your role and responsibilities within the finance department. Ready to discover how automation can transform your AP function and position your organization for future growth? Schedule a demo today.
Controller vs. CFO FAQs
1. Is the controller higher than the CFO?
No, the controller is not higher than the CFO in the organizational hierarchy. The CFO reports directly to the company’s CEO, while the controller reports to the CFO. The CFO is a senior executive position that oversees the entire financial department of an organization. On the other hand, the controller is responsible for the daily operations of the accounting and finance departments.
2. Is the controller the same as the COO?
No, the controller is not the same as the chief operating officer (COO). The controller is a finance-focused role, ensuring the accuracy and integrity of the company’s accounting and financial operations. The COO is focused on the overall operational effectiveness of the company, overseeing a broader range of departments and functions.
3. Do companies need both a CFO and a controller?
Whether a company needs both a CFO and a controller depends on its size, complexity, and stage of growth. Smaller companies often find that one role can cover both functions or that they only have enough work to support a part-time or fractional CFO. However, as a company grows and its financial operations become more complex, the need for a CFO and a controller becomes more pronounced.
4. Who reports to the CFO?
Organizational structure varies between companies, but positions responsible for various aspects of the company’s financial components typically report to the CFO. These could include roles such as controller, treasurer, director of finance, tax manager, chief risk officer, or investor relations manager.
