The construction industry is characterized by tight profit margins and significant cash flow challenges and your company’s success depends on strong financial leadership to meet your construction accounting needs. To meet this need, many contractors reach a point where they should either appoint or hire a Controller or Chief Financial Officer (CFO). However, the differences between these two roles are often misunderstood.
The primary difference between a controller and CFO is that the former tracks and reports financial performance, while the latter develops strategies to improve that performance. The controller’s role is tactical, while the CFO’s role is more strategic. Gain more insight on how the two differ below:
- Performing accounting, bookkeeping and basic cash-flow tasks
- Preparing daily, weekly or monthly financial reports
- Overseeing payroll
- Supervising accounts receivable and payable
- Closing the books and preparing month-end financials
- Overseeing tax reporting and compliance
- Controllers may also be responsible for upholding internal controls to guard against financial misreporting and fraud, and most are the go-to expert on their companies’ accounting software.
- Preparing budgets, forecasts and complex financial projections
- Maximizing cash flow
- Reviewing and analyzing monthly financial statements
- Establishing policies and procedures to ensure the integrity and accuracy of management reports
- Understanding how finance and business operations are interrelated and harmonizing the two
- Developing and maintaining an effective capital structure
- Overseeing tax planning and strategy
- CFOs may also spend time negotiating with lenders and other funding sources, and maintaining relationships with banks and sureties. In addition, a CFO will help with the company’s technology purchasing decisions.
If you lack the resources or don’t want to bring someone in-house, outsourced controller or CFO services can be an effective solution — either permanently or until you’re in a position to hire someone. You might also engage a CFO/consultant on a short-term contract to help you target a strategic direction.