The concept of a financial controller, also sometimes called a comptroller, can be confusing when looking for leadership for your finance function. At first glance, they seem very similar to a chief financial officer in that they both can hold a financial manager role. At some companies, especially small businesses, your finance department can actually be run by a controller instead of a CFO. On the other hand, it isn't uncommon in a larger company to have a controller who reports to a CFO.
While it is true that a controller can hold many of the same responsibilities as a traditional CFO, they are usually considered a chief accounting officer. They often are a strategist, but a controller's work more often falls into the reporting and analysis categories. So, what exactly is a controller's role, and what do they do to help your accounting team?
What is a controller?
Usually, a controller is a Certified Public Accountant (CPAs) with a Bachelor's degree or Master's degree (MBA). In smaller companies, they can often hold a senior position with employees reporting to them and report directly to the CEO. In some companies, they work underneath a CFO. They are responsible for a large portion of financial and accounting decisions for the department. The responsibilities they hold often change dramatically depending on the company's architecture and needs.
A controller's focus is on financial reporting analysis, preparation of financial statements like income statements, control monitoring, and compliance. They help break down, interpret, and translate reports and finances to the company. Sometimes they have an assistant controller to help them with these tasks and will sometimes work in conjunction with a treasurer.
Typical controller responsibilities
Controllers oversee things like financial data and reports, cash flow, balance sheets, and financial transactions. They often are the company's expert in GAAP (generally accepted accounting principles). Unlike a traditional CFO who focuses on things like strategic planning and fundraising management, controllers are more focused on reporting, risk management, and has expertise as a financial analyst. They provide detailed and accurate financial reports for investors and business administration and are keenly aware of the company's financial needs like scalable systems and internal controls.
A controller's roles can vary; however, reporting is often their main focus. They also usually ensure books are accurate and that there isn't an excessive amount of expenses or debts. They usually bring this data to executives and translate the reports from complex numbers to plain language. Controllers keep close tabs on compliance and accuracy in the case of an audit. If the company has any business acquisitions, mergers, or asset sales, the controller is often closely involved in planning and executing these projects. They also keep tabs on the newest technology involved in accounting and finances to keep the company updated.
Similar to the confusion between a controller and a CFO's responsibilities, it is often asked what a controller will do for a company that a bookkeeper doesn't. Bookkeepers often handle similar tasks to a controller, but when hiring a controller, you will expect that they have experience in many if not all of the previously mentioned responsibilities. Bookkeepers usually work within accounting departments, not in a managerial position overlooking the department. While they also often work within financial records, they hardly ever are in charge of making financial business transactions. You can read more about these differences in our article here.
How controllers work with the finance team
The controller often oversees much of the financial team, including financial managers, payroll and tax managers, accounts payable and receivables managers, accountants, credit analysts, and other financial employees. They often have experience with hiring, onboarding, training, and developing new hires within the accounting department. Sometimes they will work in tandem with an assistant controller or treasurer, and it isn't uncommon for them to hire clerks, bookkeepers, or administrative assistants to help them with their tasks. If working with a CFO, they will report to them, and duties will be split accordingly between the two roles. Controllers will often overlook projects within the department, delegate work as needed, and help with reporting.
Now, it is also the controller's duty to provide the newest technology to the finance team to help them more efficiently do their jobs. Things like accounts payable automation and AI tools are revolutionizing the workplace, cutting down on the menial tasks within accounting. It is now their job to evaluate these technologies and their ROI and suggest them to the executives when they may empower the finance team.
When you should hire a controller
For smaller or new companies, controllers and CFOs are somewhat interchangeable. Hiring under one title or the other often has slightly different implications, so investigating the two different roles and how they would fit into your company ecosystem is important before deciding which is the best fit. A controller often implies a heavier weight on data analysis and reporting, while a CFO is often looked at as a chief financial strategist.
If you have a CFO and are wondering when it is best to hire a controller to help, the best place to look is at your company's growth. As your finances become more complex and you potentially open multiple branches, it can be hard for your CFO to perform the increasingly difficult tasks assigned to them. This is when you want to hire a controller to help alleviate some of this pressure and focus solely on reporting, audit compliance, and data tracking. It also may be time to hire a controller if your board of directors is growing or your stockholders.
CFOs, controllers, bookkeepers - trying to figure out what is best for your company and its growth can be difficult. Hopefully, this article helped you better understand when it is appropriate to hire a controller. Remember, there is no one right answer for how to structure your financial team. Examine your specific department's needs and expected growth and meet those requirements and upcoming demands as best you can.