VIEWpoint Issue 1 | 2023
2023 Compliance Trends: Staying Ahead in an Evolving Regulatory E...
2023 Tax Calendar
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:
|Construction Controllers: Here and Now||Construction CFOs: Thinking Ahead|
|Typically handles the day-to-day duties of financial management, including:
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.
|Responsible for supervising the company’s overall financial operations, as well as:
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.
How do you know when you need a controller or CFO? If your construction company currently employs neither, someone is fulfilling these roles. Often it’s the owner, who wears several hats and barely has time to breathe. If all of this sounds too familiar, and your company is growing rapidly, you may want to explore at least adding a controller to help you out.
By the same token, if you already have a controller and he or she is struggling to keep up, it might be time to add a CFO. Controllers and owners alike can find themselves stretched too thin trying to track the company’s finances and make strategic moves to grow the business.
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.
Whether or not now’s the time to add a controller or CFO, don’t forget the value of the objective expert advice offered by your CPA and other professional advisors. Doeren Mayhew’s Business Advisory Group offers management support to help optimize your financial, growth and operations performance with outsourced CFO/Controller solutions. To further explore your current management needs, contact our construction CPAs today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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