The CFO'S Perspective

How to Choose Between a Controller and a CFO

Published In: 425 Business Magazine, February 2015
Author: Marjorie Clark

Job titles often are a matter of semantics in a small company. When there’s work to be done and just a few people to do it, a person’s title might not encompass the position’s actual duties. This holds true in finance. Deciding when to bring on someone specifically to handle finances is a difficult choice, and when you do make the hire, what job title do you give them?

In all but the smallest companies, hiring a controller is a good bet. A controller is a company’s operational accounting expert and will be the go-to person for anything related to daily finances. Someone needs to pay the bills and people around there, right?

A chief financial officer is another option. The CFO operates as a companion to the CEO, overseeing the long-term financials and serving as a strategic partner. According to The Brenner Group, a Cupertino, California-based finance and accounting firm for technology companies, a CFO can help a company avoid mistakes in raising capital, optimize cash management, avoid groupthink, and build credibility with the board of directors and potential investors.

A hands-on CFO in a small company will handle tasks that are normally the charge of a controller. In a midsize or large company, a CFO will handle long-term and big-picture items, and the controller will handle day-to-day business. A common situation you’ll find at smaller companies is someone who functions as both the bookkeeper and the CFO.

Another option for small companies is to hire an interim or part-time CFO or controller who can provide senior-level advice without breaking the startup bank. For those not quite ready to hire a controller or a CFO, some incubators […] offer clients access to financial services.

Many Eastside financial firms have teams that focus on small businesses and startups, so don’t wait until revenues reach $100 million before getting your finances in order.

Hiring a Finance Lead

1. Sooner is better than later: Don’t wait until sales are through the roof, the books are a mess, and you’re ready to price out an IPO. That’s way too late. Getting a finance-minded person on board early can help you hire the right team and plan for those big, long-term financial moves.

2. It’s OK to start small: A controller or part-time CFO is better than no financial leadership at all. If the salary of a full-time CFO is out of your price range, bring your dreams back down to Earth and get yourself a consultant to help figure out the best bang for your buck.

Topics: Recruiting News