The difference between a CFO and a Controller has been looked for ages now. With a very thin lining between the two of them, they share the same differences as twins.
The distinction between a Controller and CFO is that of perspective. A Controller is more focused on compliance and historical record keeping or rather it should be said in other words, tactics; while a CFO tries to focus on planning and future performance.Though controllers usually come from an accounting background, the same is not true for CFO’s. Because of the standardisation of the accounting process, more and more CFO’s come from a financial or banking background.
For a better understanding, here are both the financial terms well explained.
Chief Financial Officer (CFO)
A CFO is the one with responsibility for the financial affairs of a corporation or other institution.
Roles/Responsibilities of CFO:
- Financial Planning and record-keeping, as well as financial reporting to higher management. A CFO must conduct his duties of planning strategies for the organisation effectively for better future prospects and to present a better financial report to the highest level of management.
- Analysis of Data. The correct analysis of data is as important as the workforce itself. Proper analysis helps the readers of financial statements in predicting the life of the business accurately.
- Supervising the finance unit and the chief financial spokesperson for the organization. Financing is one of the pillars on which an organisation stands. CFO is given the responsibility of handling the finance division.
- Budget management, cost–benefit analysis, forecasting needs and the securing of new funding.
- Leadership And Strategy Making
- Operational Finance, FP&A(Financial Planning and Analysis)
- Budgeting and Forecasting
A controller is an individual who is given with the responsibility for standardised accounting, management level accounting practices and financial activities.
Roles/Responsibilities of a Controller:
- Preparation of operational budgets. Budget preparation is one of the core activities of financial reporting of an enterprise. The future planning of the organisation depends on the budgets made.
- Supervising financial reporting and executing essential duties related to payroll. Payroll accounting demands analytical duty which is given to the controller for a better result.
- Establishes monitors and controls Internal Control of an organisation. Proper internal controls are essential for an organisation for an error free, fraud resistant working of an organisation. Internal controls placed effectively in an organisation helps in better audit and prevention of frauds.
- Technical and functional skills in Financial Controlling.
- Ability to develop, motivate and manage team and efficiency to work with similar staff.
- Strong analytical and financial skills.
- Excellent Professional ethics.