When Should You Hire or Outsource a Controller or CFO?

As a business owner wearing many hats, you may have been thinking about growing your financial team. Or maybe you’ve seen rapid growth, and you’re not sure how to strategically manage your finances. There are many reasons to consider bringing on a Controller or CFO to help manage your finances. Even if you do not fully understand the difference between a CFO and a controller, or if you need one, this post will help you figure out how to reach the next stage of your financial management. 

Controller vs. CFO

Controller and CFO titles are often used interchangeably because they have many similarities and overlapping duties. Smaller businesses often have one or the other, while larger companies frequently utilize both. Although they are similar, there are a few key differences that set them apart from one another.

What is a Controller?

A controller is essentially a financial manager or a “super bookkeeper.” They manage and oversee all accounting-related tasks, including accounts payable and receivable, budgets, payroll, bank reconciliation, financial reporting, and more. Depending on the company’s size, they may also be responsible for managing the employees performing these tasks. A good financial controller can help increase profit margins, employee productivity, and financial savings. 

Controllers manage all your accounting processes and can help you establish or improve your financial policies and systems. As a small business, you might not have an HR department. Controllers can take on some of these responsibilities, such as managing employee benefits and maintaining employee records. A controller can initiate regular internal audits or manage any audit you might receive from the IRS. They can help prepare your business to scale by providing accurate financial reporting.

Controllers focus on financial accuracy and management. They might pull double duty as a bookkeeper and controller. A CFO might have similar responsibilities, however their focus is something entirely different.

What is a CFO?

A CFO may be responsible for many of the tasks a controller does, especially in a smaller company where there is only one of the two. What sets a CFO apart is their focus on forecasting, business strategy, and operations.  For businesses with both positions, controllers report to the CFO, who interprets metrics and helps the CEO determine what actions to take. Where a controller is analytical, a CFO is strategic. focusing on how to take the business to the next level.

Am I Ready to Hire a Controller or CFO?

Many small business owners start out managing the business finances themselves until they can afford to scale and hire. It might be time to bring on a controller or CFO if:

  • Your business is growing quickly, and you feel like you can’t keep up.
  • Your financial tasks are getting more complicated and time-consuming.
  • You need a clear financial system in place.
  • You’re spending too much time on accounting instead of business management and growth.
  • You have a financial team, but you need help managing them.
  • You’re ready to scale your business.

Should I hire a controller or CFO? 

If you’re a small business, you likely only need one or the other. You should consider hiring a controller if your business needs:

  • Accounting records that comply with Generally Accepted Accounting Principles (GAAP).
  • You need help with financial management and reporting.
  • The person in charge of the books can’t keep up with the financial data.
  • You need to create a budget or a financial plan.

You may want to consider hiring a CFO if you are in (or anticipate) a transition stage, such as merger or acquisition, you need help making decisions on investments, or you need financial forecasts and strategy. 

Or maybe you need the skills a CFO and a controller can bring, but you’re not ready to bring on both. Some accounting professionals, such as my team at Automated Accounting, offer a hybrid solution. You can have the perks of having both a CFO and a controller without the expense of employing both positions. 

The Financial Impact

CFOs and controllers can help grow your company by keeping your business on track by recommending solid financial management practices. You’ll get clear guidance on how to grow and scale based on comprehensive and accurate financial records. If you’re managing the accounting yourself, you’ll gain the freedom to focus on more profit-based activities in your business. 

You can further save costs by outsourcing your accounting roles. You’ll gain all the benefits of having a controller or CFO at a fraction of the staffing cost. You won’t have to worry about all the overhead expenses associated with bringing them on as a full-time employee. You’ll save money and gain a partner who is dedicated to your financial growth—a clear win-win!  

How to Take the Next Step

If you’re ready to bring on a controller or CFO to help you manage your business finances, book a call with me today. I’ll help you understand which type of financial management service will propel you and your business forward so that you can grow and scale.