Your Financial Cast of Characters: Understanding the Difference Between CFO, Controller and Bookkeeper

April 2019 | Article

As your company grows, your internal team will hopefully grow as well. One of the key areas to invest in is your accounting department. After all, your financial information tells a story of where your business is going, where your business is falling short and how you can strategically improve.

The only way to get this kind of financial information from your accounting department is through the right cast of characters, each of whom plays a different role and has a special skill set and way of thinking. They all also contribute to the overall success of your organization. But what is the difference between a CFO and a controller? What does a bookkeeper do? How do you know who to hire in your business?

What Does a Chief Financial Officer Do?
A Chief Financial Officer (CFO) is your top-level financial person. A CFO is responsible for oversight of your finances as well as business strategy. A CFO helps you map out your long-term growth and eventual exit. They help you see big picture for your organization while also supervising the financial duties.

CFO duties include:

  • Overseeing the administrative accounting functions/processes to ensure they are running smoothly.
  • Providing management with the information they need to make decisions surrounding investments, purchases, next steps and so on.
  • Helping to interpret your organization’s financial information in a meaningful way. A CFO not only presents you with the financial portion of your business, but also helps you see why it matters and the impact it will have.
  • Guiding your business toward strategic growth and identifying areas of improvement as well as threats.

The role of a CFO is big-picture thinking, and a large portion of their job focuses on strategy. A CFO’s job is really to understand your business and its strengths/weaknesses as well as how to leverage those strengths and improve those weaknesses to achieve what you’ve set out to accomplish. They are not, however, responsible for the day-to-day tasks related to your financial work—that falls to a controller.

What Does a Controller do?
A controller in the accounting function of an organization is the person responsible for supervising the day-to-day task-related financial work. The role of a company’s controller is to manage the company’s finances and ensure their timeliness and accuracy. Controllers also have responsibility for the accounting department team.

Responsibilities of a controller will include:

  • Accounting system set-up and maintenance
  • Financial statement preparation and reporting
  • Bank and credit statement reconciliation
  • Accounting staff, including supervision and training
  • Budgeting
  • Procedure documentation
  • Payroll
  • Accounts payable and receivable
  • General ledger maintenance
  • Tax compliance

The controller is the gatekeeper of the financial information, bridging the gap between data entry and strategy.

What Does a Bookkeeper Do?
A bookkeeper’s responsibilities center around completing the day-to-day accounting and financial work. This includes:

  • Everyday business transaction processing
  • Task related reporting (such as sales tax, payroll, etc.)
  • Maintenance of supporting documentation (such as invoices, bills, receipts, Form W-9s, exemption certificates, credit applications, etc.)

A bookkeeper is like a storehouse of information about your business. They know things like chart of accounts, procedures related to functions such as accounts payable and receivable, how to maintain invoices and more. They are not, however, expected to make strategic business decisions based on this information.

CFO vs. Controller: What do you need?
As you can see, CFOs are higher-level strategic thinkers who oversee not just your financial information, but also how it broadly applies across your business. A controller, on the other hand, manages the day-to-day financial tasks that make up your accounting strategy. They will also oversee any accounting staff, such as bookkeepers, and ensure your records are accurate and timely.

Each of these roles has a specific purpose within your organization. Each also comes with a specific skill set. Depending on your size of business, however, the price tag associated with three different roles (and possibly more) can seem overwhelming.

The good news is that not all of these individuals have to be actual employees of your organization. Many companies choose to outsource critical financial functions of their business until they can afford to bring a full-time resource in house.

Learn more about the reasons to outsource by downloading our “Why Outsource?” infographic.

Understanding your finances and your financial journey is a critical first step in determining the financial professionals your company needs. From there, you can find a trusted business advisor, or advisors, to help you along the way.

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