Difference Between CFO and Controller
A chief financial officer CFO of an organization is a senior executive assigned with the task of managing companies affairs especially from the point of view of finance and money where his/her work is to manage effective procurement for new expenditure, investments of existing idle cash flow, utilization in the optimum manner and analyses of organization’s financial strength and weakness; whereas controller is primarily responsible for financial reporting, record keeping, management of information technology and accounting and therefore they are mainly the people from accounting background as opposed to finance and banking background of CFO.
CFO stands for a chief financial officer for a company and comes directly below the CEO of the company. CFO controls and manages everything related to finance in a company. Controller, on the other hand, reports directly to the CFO of the company and makes sure the day to day operations relating to finance is executed and run properly.
Who is a CFO?
- There are three important divisions that report directly to the CFO of a company. Those three divisions are the controller, treasurer, and tax manager. Again the position of the controller is divided into four more subdivisions.
- The function of a CFOCFOThe full form of CFO is Chief Financial Executive, and he or she is a top level executive of the firm who is responsible for the firm's overall finance functions and has the authority to make financial decisions for the organization. is to control and manage everything that relates to finance in a company. Though he is responsible for overlooking everything related to finance, his primary role is to make forward-looking budgetingBudgetingBudgeting is a method used by businesses to make precise projections of revenues and expenditure for a future specific period of time while taking into account various internal and external factors prevailing at that time., projections, planning, and other forward-looking financial strategies.
- That’s why in order to run the operational and backward-looking functions related to finance there are three more divisions who report directly to the CFO. A CFO is essential whenever a company needs to make accounting changes or has chosen between projects by doing projections and cash flow forecastingCash Flow ForecastingCash flow forecasting is forecasting or anticipating the cash inflow and outflow for the future period by the management of the business to make sure that the business will have sufficient funds to carry out the activities on a regular basis, and if there is any shortfall, they has to plan for alternate sources of funding for the business. or want a solution for complex financial strategies.
Who is a Controller?
- A controller’s rank is similar to the ranks of treasurer and the tax manager of a company.
- Under the controller, there are four more divisions that directly reports to the controller. Those four divisions are accounting manager, financial planning manager, accounts receivable manager, and accounts payable manager. The main function of a controller is making sure that the day to day operations relating to finance is executed and run properly.
- These functions include approving all day to day transactions within the organization and create recurring and monthly reports for the same. Its function also includes keeping track of all the accounts receivablesAccounts ReceivablesAccounts receivables is the money owed to a business by clients for which the business has given services or delivered a product but has not yet collected payment. They are categorized as current assets on the balance sheet as the payments expected within a year. and accounting payable for the company.
CFO vs Controller Infographics
Let’s see the top differences between CFO vs Controller.
- CFO of a company is responsible for almost anything related to finance the rank of a CFO in the company comes just below that of a CEOCFO In The Company Comes Just Below That Of A CEOCEO is the highest-ranking executive with the primary responsibilities of taking major corporate decisions, a medium of communication between corporate working and the board of directors. Whereas, CFO is a senior executive responsible for financial affairs, taking significant decisions relating to investment, making strategies and managing financial activities.. The controller of reports directly to the CFO of the company and the rank of a controller within the organization is under CFO.
- The main function of a CFO is to make future projections of cash flow and make financial strategies and make estimates to decide which project to undertake. A controller is responsible for the smooth functioning of the day to day finance-related operations. Those involve approving transactions to create weekly and monthly reports and also look after accounts receivables and accounts payables.
- There are three important divisions that report directly to the CFO of the company they are a controller, treasurer, and tax manager. There are four important divisions that report directly to the controller of the company they are accounting manager, financial planning manager, accounts receivable manager, and accounts payable manager.
- The rank of a CFO is similar to other positions like a chief operating officer (COO), chief information officer (CIO) (CIO)CIO stands for Chief Information Officer, a designation usually given to the highest executive senior, who is in charge of the information technology strategies and undertakes roles like recognizing the need and technology development in the enterprise, installing and maintaining hardware and software of computer systems. and chief marketing officer (CMO)(CMO)The full form of CMO is Chief Marketing Officer. The CMO is the person in charge of managing the return on investment of organization's marketing efforts and is also responsible for overseeing activities, communication, and the generation of opportunities that aid in the maximization of value for clients, customers, and business partners.. A controller’s rank is similar to the ranks of treasurer and the tax manager of a company.
CFO vs Controller Comparative Table
|Definition||CFO stands for a chief financial officer for a company. The rank of a CFO in an organization comes just below that of a CEO.||The controller makes sure that the day to day operations relating to finance is executed and run properly.|
|Hierarchy||The rank of a CFO within the organization comes just below the CEO.||They rank below the CFO in the hierarchy of an organization|
|Divisions||There is three important division which reports directly to the CFO of a company. Those three divisions are a controller, treasurer, and tax manager.||Under the controller, there are four more divisions that directly reports to the controller. Those four divisions are accounting manager, financial planning manager, accounts receivable manager, and accounts payable manager.|
|Function||Though the responsibilities of CFO are overlooking everything related to finance, his primary role is to make forward-looking budgeting, projections, planning, and other forward-looking financial strategies.||The controller is responsible for approving all day to day transactions within the organization and creates recurring and monthly reports for the same. Its function also includes keeping track of all the accounts receivables and accounting payable for the company.|
|Joint Ranks||The rank of a CFO in an organization comes just below that of a CEO. The rank is similar to other positions like a chief operating officer (COO), chief information officer (CIO) and chief marketing officer (CMO).||A controller’s rank is similar to the ranks of treasurer and the tax manager of a company.|
In a large organization, it is important to have divisional and sub-divisional heads in order to look after the smooth function of the various roles. That’s why the roles of heads like CFO and controller plays a very important part in the functioning and decision making in an organization. A CFO on papers is responsible for anything to do with finance in a company.
But as it not possible for one person to look after everything he has divisions who directly report to him. One of those important divisions is that of a controller who is responsible for mainly manage the day to day finance operations which includes accounts receivables and accounts payable. The CFO has to make all the critical decisions related to finance like cash flow projections, budgeting, making a decision on which project to choose, and also take care of all the impacts of accounting changes.
This has been a guide to CFO vs Controller. Here we discuss the top differences between CFO and Controller along with infographics and comparison table. You may also have a look at the following articles –