Virtual CFO vs. Controller: What’s the Difference?

As you’re growing your business, you’ll likely come to the point at which you need someone else to help handle your company’s finances. 

There are several options for approaching this: 

  • Hire a full-time CFO
  • Hire a virtual CFO
  • Outsource your accounting and bookkeeping to an accounting firm
  • Hire a controller
  • Hire an accountant

But how do you know which path is right for your business? 

The key is to understand what each job function entails, and what sorts of services you can expect from a person in that role. One of the distinctions that seem to be the most confusing to business owners is that between a virtual CFO and a controller. Here’s a breakdown of how they differ, what you can expect from each, and how to know whether you need one or the other. 

What is a Virtual CFO?

A virtual CFO is a remote, contracted individual who manages the big-picture, long-term financial functions of a business. 

What makes it “virtual” is the remote element, as well as the fact that he or she will work with you part-time. A virtual CFO typically provides services to one or more clients, whether through a financial services agency or as a freelancer. 

Virtual CFOs generally provide services including: 

  • Strategic goal management
  • Debt management
  • Cash flow management
  • Budget creation and management
  • Tax planning 
  • Tax reduction
  • Financial reporting and evaluation
  • Contingency planning
  • Salary and benefits analysis
  • Recruitment and vetting of lower-level financial hires
  • Due diligence

Virtual CFOs can be a great option for small businesses that can’t or don’t want to take on the expense of a full-time, executive hire. With a virtual CFO, you can set a specific number of hours or pay a flat fee per month (depending on the person or agency you choose), staying within your budget and gaining access to financial guidance that you wouldn’t otherwise be able to. 

What is a controller? 

Controllers, like virtual CFOs, handle a wide range of financial duties—but they’re primarily concerned with the day-to-day accounting functions of the business, rather than long-term goal setting and guidance.  

In a company with an accounting department, the controller is responsible for leading the department and managing the rest of the accounting staff. If the controller is the only member of the financial staff or the accounting department, then he or she would take on somewhat of an advisory financial role, in addition to his or her other duties. 

This is especially true when the CEO is essentially taking on the CFO role in addition to their role as founder and chief executive. 

Some of the services a controller could provide include: 

  • Developing financial processes and policies
  • Preparing and managing budgets 
  • Managing daily bookkeeping, or a bookkeeping staff
  • Approving expenses
  • Signing checks
  • Managing invoices and expenses
  • Generating financial reports
  • Analyzing and interpreting financial reports
  • Obtaining and managing insurance
  • Financial risk management
  • Working with HR to manage staff benefits
  • Cash flow management
  • Debt management
  • Debt collection

As you can see, there is some overlap between the job functions of a CFO and controller. 

In essence, a controller is a right-hand assistant to a CFO or the CEO for all financial matters. 

Are there virtual controllers? 

It is possible to outsource financial functions to a virtual controller, who will work remotely on a part-time basis as a virtual CFO. 

He or she would provide many of the same functions of a full-time controller.

How do I know if I should hire a controller or a virtual CFO? 

When it comes to building out your finance department and choosing between a virtual CFO and a controller, there are a few things to consider.

First, there’s the cost. If you are prepared to pay a full-time salary with benefits, then a controller could be a good choice. You’d have the benefit of a full-time employee running your financial department, freeing you up to focus on the rest of the business. 

What’s more, controllers handle many of the administrative, detail-oriented, and daily financial tasks that can take away time from functions like strategic planning. 

On the other hand, a virtual CFO could be the right fit for your business if you need hands-on financial guidance to get you through a growth stage, or to help you scale the company. Instead of paying the significant expense of a full-time CFO, you can pay for the services and time you need, without worrying about benefits or a salary. 

Controllers and virtual CFOs both serve important roles in small businesses. Choosing the right one for your company will mean looking at your needs, your budget, and where you want your business to be in the next few years. 

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