Difference Between a CFO and a Controller/ Bookkeeper

Many small business owners do not understand the difference between a CFO (Chief Financial Officer) and a Controller / Bookkeeper. Many believe that a CFO and a Controller perform the same tasks. This could not be further from the truth. There are two major aspects to the accounting function:

  1. Statutory processing
  2. Utilizing financial information to proactively run the business

Statutory Processing

The statutory function pertains to processing accounting transactions. Many businesses only use the accounting function for statutory purposes: collecting receivables, paying vendors, paying taxes, paying the bank, etc. Financial statements are prepared primarily to keep the bank “happy”. This type of work is performed by a bookkeeper / accountant and in larger firms is supervised by a Controller who will prepare the financial statements.

Many small business owners are not utilizing financial information to proactively run their business.

Utilizing Financial Information

A CFO assists the business owner in using financial information to proactively run the business by:

  1. Understanding what the numbers mean and what decisions need to be made.
  2. Setting company goals and monitoring progress to make timely and appropriate changes to achieve the objectives.
  3. Forecasting future results and making the necessary changes to achieve the desired outcome.

CFO Responsibilities

A CFO provides financial guidance for the company and works closely with the business owner. A CFO’s responsibilities include (but are not limited to) providing and managing:

  • Financial analysis
  • Cash management
  • Budgeting
  • Forecasting
  • Strategic planning
  • Cost accounting
  • The accounting function
  • Information technology
  • Human resources (in many companies)
  • The banking relationship
  • Risk management
  • Outside accountants

Business owners not using financial information to proactively run their business are at a competitive disadvantage.

If you are not getting exceptional financial guidance, contact CFO 4 Small Biz™.