It’s not always obvious which roles you should be hiring for in your company or when to do so. For many high-growth startups, hiring for the financial side of a business presents its own set of complexities, among them whether to  hire a controller or a chief financial officer (CFO). What’s the difference in these roles, and which one is most important for your business?

This article examines the roles and responsibilities of a CFO vs. a controller, and identifies signs that indicate your startup should hire one or the other. We’ll also introduce a third option that can fulfill your startup’s financial management needs—without hiring either one. 


Learn more about what CFO services can do for your business with a demo of Zeni.


CFO Vs. Controller: What’s the difference?

A CFO is:

The senior executive responsible for managing the financial actions of a company. The CFO's duties include financial planning and tracking cash flow as well as analyzing the company's financial strengths and weaknesses and proposing corrective actions.  


CFOs focus is on long-term strategic financial planning and growth working closely with the CEO; they make decisions based on analysis of the accounting department as well as the sales and marketing departments. In addition to strategic planning, CFO responsibilities include overall financial strategy,  preparing financial projections, scenario modeling, comparing actuals vs. budget, reporting and presenting financials to the board/investors, and more. 


A controller oversees the accounting operations of a company. 


Controllers are responsible for financial management and regulatory compliance; overseeing accounting and record-keeping operations, including preparation of financial reports (profit & loss/income statement, balance sheet and cash flow statement), are included in their role. They may also be responsible for managing other business-wide issues, including IT, human resources, insurance, sales tax reporting, and federal income tax reporting, among others. 


You can learn more about the role of the controller in our article, When Should Your Startup Hire a Controller?



CFO vs. Controller Responsibilities: A Detailed Breakdown 


Area Of Responsibility

CFO

Controller

Functional oversight/management

 

 

Accounting: GAAP

Accounts payable/receivable/billing

 

Financial Analysis

 

Tax

 

Treasury Strategy

 

Non-finance staff responsibility (HR, IT, etc.) 

 

Strategic Planning

 

Participation in strategy discussions

 

Selection of initiatives

 

Creation of financial plan (p/l, b/s, cash) 

 

Tax strategy

 

Risk Management Strategy

 

Internal Control Strategy

 

Market/Product Analysis

 

Management Reporting

 

 

Design management reports

 

Prepare management reports

 

Develop action plans for management reports

 

Design financial statements: historical and projections

 

Prepare financial statements: historical and projections

 

Budgeting/Forecasting

 

 

Develop budget targets and other financial plans

 

Facilitate budget process

 

Prepare budgets and financial forecasts

 

Project cash flows

 

Review capital requests/approval process

 

Process capital requests

 

Job costing

 

Board of Directors/Investors

 

 

Board reporting, preparation and delivery

 

Maintain investor relations

 

Contracts/Outsourced Functions

 

 

Negotiate contracts

 

Negotiate outsourced functions

 

Maintain insurance coverage

 

Mergers & Acquisitions/Divestiture Activities

 

 

Develop M&A targets

 

Financial offer

 

Negotiate acquisitions

 

Due diligence

Implementation

Divestitures/shutdowns

Investment/Funding Activities

 

 

Develop banking relationships

 

Maintain banking relationships

 

Arrange debt financing

 

Conduct equity placements

 

Invest funds

 

Issue credit to customers

 

Monitor cash balances

 

SEC/SOX/Internal Controls/Audit

 

 

Review and submit SEC reports

 

Prepare SEC reports

 

Design and review policies and procedures

Maintain policies and procedures

 

Review internal control system

Maintain internal control system

 

Manage auditor relationship

Prepare audit information/schedules

 

Develop action plans relative to internal control needs

Financial Analysis

 

 

Develop key metrics measurements

 

Maintain key metrics measurements

 

Banking and operational reporting package

 

Develop action plans

Which Does Your Startup Need—A CFO Or Controller? 

The answer to this question depends on your company’s size, stage of business, and infrastructure. 


Some signs that you may need a controller are:


  • You are experiencing rapid growth—and therefore have complicated finances. 
  • Your annual revenue is between $500,000 and $1 million. At that revenue level you are required to keep accounting records according to Generally Accepted Accounting Principles (GAAP), and so would benefit from hiring someone who can offer advice as well as take care of historical financial records. (We recommend that even startups below this revenue level follow GAAP accounting—here’s why.) 


Some companies skip hiring a controller and instead hire a CFO. We do not recommend this for smaller companies, as most startups at the seed or Series A stage don’t have enough tasks to require 40+ hours of work from a full-time CFO each week. The major issue here is that companies who hire a CFO too early end up paying someone a full-time, CFO-level salary to carry out tasks that aren’t CFO-level, and should be carried out by another role. Additionally, a CFO typically isn’t involved in everyday accounting duties, data entry, supervision of bookkeeping staff, etc. CFOs are business advisors and contribute to the fundraising process, but don’t don’t oversee day-to-day financial data.


Learn more: When Startups Should (And Shouldn’t) Hire a Chief Financial Officer


When you might need a CFO:

  • As your company grows, you may find your controller does not have adequate business experience to advise on growth strategies. 
  • If you still don’t have enough work for a full-time CFO, consider working with a contract or part-time CFO instead. Part-time CFO solutions offer many of the benefits you would expect from an in-house CFO, but on an as-needed basis that suits early-stage startups.


Zeni: A Smart Financial Solution For Early-Stage Startups

For early stage startups that don’t need a full-time CFO, a solution like Zeni is the best choice. 


Zeni is a full-service finance firm that handles your startup’s part-time CFO needs as well as the bookkeeping and accounting functions for startups and small businesses. Unlike other fractional CFO services, Zeni handles finance functions more cost-effectively and intelligently than traditional outsourced CFO solutions. 


When you sign up for the Zeni CFO Plan, you get a dedicated CFO advisor as part of your finance team with experience in your business vertical who handles all your financial planning and analysis, including:

  • Scenario modeling and cash flow projections
  • Variance tracking between budget and actuals
  • Ongoing financial consultation
  • Preparation for key financial reporting
  • Presentation of your business financials in board meetings. 


In addition to CFO services, Zeni also manages all your bookkeeping and accounting, including daily bookkeeping, bill pay, and invoicing with our AI-powered system. As a result, your CFO advisor won’t need to spend time on basic finance tasks, and can focus on the areas that actually require their expertise. Plus, this deep understanding of your company’s finances means your CFO advisor will hit the ground running, and can start delivering the CFO support you need from day one—all for a flat, monthly fee. 


From monthly bookkeeping and accounting services to invoicing and CFO services, Zeni is the full-service solution your startup needs. Get a demo of Zeni today!

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