A “Controller” is the accounting department manager. Some units of government use the term “Comptroller.”
A Controller guides preparation of financial statements, ad hoc reports and analyses; supervises processing of routine transactions like billing, receipts, bill paying, payroll and cost accounting; manages cash flow; administers internal controls; and supervises accounting department staff. In small organizations the Controller might perform all of those functions hands-on, while in larger places the Controller serves more of an executive role.
A “CFO” is an entity’s Chief Financial Officer. The CFO supervises the Controller but focuses on higher level strategic financial management. Duties might include banking and auditor relations, budget planning, leading strategic efforts to reduce costs or increase revenues, and special initiatives. In small organizations the Controller functions as CFO.
A contract Controller/CFO works in-house for an organization, in contrast to an external public accountant who performs most of his or her write-up, tax or audit work at their own office. A contract Controller/CFO is the organization’s internal professional accountant, gets to know the organization the way only an insider can, and is there year-round. He or she performs a variety of duties that help the organization maintain accurate records, reduce opportunities for financial error or loss, and maximize cash flow, efficiency and profit. All financial records remain at the organization’s premises. The contract Controller/CFO is part of the team, working together with the CEO to strengthen the business without the information gaps that might occur with an outsider.
The Wall Street Journal has identified contracting for Controller/CFO services as a growing trend in tough economic times (Raymund Flandez, For Rent: Chief Financial Officer, September 22, 2009):
Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.
“They’re looking for ways to streamline and be efficient as they can,” says Glenn Dunlap, a co-founder of Milestone Advisors LLC, a small-business consulting firm in Indianapolis that provides CFO services.
Business owners often want such services when their company’s finances are getting more complex and need someone with more financial expertise, says Germain Boer, professor of management and director of the Owen Entrepreneurship Center at Vanderbilt University in Nashville.
Some business owners turn to CFOs to establish proper bookkeeping systems. Ruthann P. Lacey, owner of a law practice in Tucker, GA, brought in a part-time CFO in October. Before, an office manager handled bookkeeping while she also turned to her husband for ad-hoc financial and tax preparation advice. “I didn’t really know what the big picture was,” she says. “I only knew we made payroll every month… This is something I should have done a long time ago,” she says.
Contact Ruth Bittner today to learn more about how a contract Controller/CFO might benefit your organization.