As an accounting firm specializing in supporting startups, we understand the how important the roles of controller and chief financial officer (CFO) are to early-stage companies. While both roles are important, their roles and responsibilities differ significantly, so let’s look at how both roles function.
Before we look at the different responsibilities that CFOs and controllers have, let’s review the major accounting roles and how they work together. Typically, startups begin with very basic accounting, since their bookkeeping needs aren’t complex. As the company grows and develops, additional higher-level accounting functions are added.
Role | Responsibilities |
Bookkeeper | Typically a bookkeeper is a startup’s first financial hire, and can often be a contractor. Bookkeepers have accounting backgrounds and will record and maintain financial transactions, like expenses, and record those transactions in the general ledger. |
Accountant | Accountants have a CPA and may be full-time employees, or contractors who work with several companies. They oversee the financial records and will use the information in the general ledger to produce financial statements, like balance sheets and cash flow statements. |
Controller | Controllers are CPAs who often hold other financial qualifications, like an MBA. Controllers are senior accounting experts and oversee day-to-day accounting operations and are responsible for producing financial reports. In smaller companies, controllers may also help with financial planning and analysis. |
VP of Finance | A VP of Finance typically has a very deep accounting background, including both a CPA and leadership experience. VPs of Finance understand the company’s current and historical financial data, and, along with monitoring the company’s financial health, often manage risk and investment strategies. |
Chief Financial Officer (CFO) | The CFO is the senior executive responsible for overseeing the startup’s overall financial activities. The CFO reports directly to the CEO and the board of directors, and typically has significant strategic responsibilities, including financial planning and analysis (FP&A). |
Both CFOs and controllers have different skill sets and normally focus on separate areas within a startup’s financial organization. While some of their responsibilities can overlap, particularly with early-stage companies, controllers are typically tactical (achieving concrete objectives in a shorter time frame), while CFOs are strategic (working to define a startup’s long-term goals).
Controller | CFO | |
Focus | Accounting – the day-to-day flow of money in and out of a startup | Finance – The overall planning for future growth including the management of assets and liabilities |
Approach | Tactical – focuses on current transactions and reporting | Strategic – focuses on the larger context, like market trends, economic shifts, and financial planning |
Responsibility | Internal controls – the processes that ensure the integrity of accounting and financial information | FP&A – the processes that help startups accurately plan, forecast, and budget to achieve the company’s goals and maintain its financial health |
The controller serves as the custodian of financial integrity within a startup. They oversee day-to-day accounting operations and ensure compliance with regulatory standards. A controller’s key responsibilities include:
Let’s discuss the pros and cons of making a Controller the first senior finance hire at your startup.
While the controller focuses on maintaining financial integrity, the CFO takes a broader strategic approach to financial management. As the top financial executive, the CFO is responsible for shaping the company’s financial strategy and driving sustainable growth. Key responsibilities of a CFO include:
Ok, now let’s look at the pros and cons of hiring a CFO as your first senior finance professional.
While controllers and CFOs have distinct roles within a startup, their objectives are ultimately complementary. Controllers focus on ensuring financial accuracy, compliance, and operational efficiency, laying the groundwork for sound financial management. CFOs leverage this financial information to formulate strategic plans, optimize capital allocation, and drive sustainable growth.
Together, they are a team that propels startups towards success. At Kruze Consulting, we recognize the importance of these roles and are committed to supporting startups at every stage of their journey. Whether you’re in need of day-to-day financial oversight or strategic financial guidance, our team is here to help you navigate the complexities of startup finance.