Controller vs. CFO: Which Does Your Construction Company Need?
For a construction company to be successful, it takes a dedicated financial leader to ensure the organization’s accounting house is in order. In doing so, contractors must come to terms with the fact they’ll need to hire a controller or a chief financial officer (CFO) to keep them on track. However, there are big differences between the two titles that are commonly misunderstood. Doeren Mayhew’s construction CPAs share the differences between the two roles and identify which will work best for your unique situation.
Controllers – Living in the Now
Controllers track and report construction companies’ financial health, as well as tackle day-to-day duties. These include:
- Supervising payroll
- Basic bookkeeping and accounting
- Generating daily, weekly or monthly financial reports
- Overseeing accounts receivable and payable
- Composing month-end financials and other book-closing tasks
- Being responsible for tax compliance and reporting
Amongst other tasks, controllers may also be in charge of fraud prevention and fielding questions pertaining to the company’s accounting software.
CFOs – Thinking of the Future
CFOs are more strategic, as they are the ones who develop solutions to improve the company’s overall financial performance. Some of their responsibilities include:
- Generating budgets and forecasts
- Developing strategies to maximize cash flow
- Harmonizing business operations with finance
- Analyzing monthly financial statements
- Overseeing tax planning
- Assisting with company’s purchasing decisions
On top of these duties, CFOs may also negotiate with lenders and other funding sources, including maintaining relationships with banks.
Which is Right for You?
If your construction company presently does not have either a controller or a CFO, someone else in the business is handling these tasks. Most of the time, these responsibilities are taken on by the business owner, who is already drowning in a million other obligations. If this sounds familiar to you and your rapidly growing business, it may be time to at least hire a controller. Already have a controller but they’re struggling to keep up with your business’s financial demands? Consider adding a CFO, as controllers find themselves being stretched too thin if they’re trying to both report the company’s finances and develop strategies to help grow the business. If money is tight or you aren’t ready to bring someone in-house, consider outsourcing controller or CFO services until you are comfortable hiring someone. Engaging a consultant for CFO work on a short-term contract may also be beneficial in developing a strategic direction without paying a full salary.
Here to Help
Whether you’re beginning to consider hiring a controller/CFO or you’re ready to start interviewing applicants, don’t forget the value of the objective advice offered by your construction CPA and business advisors. Doeren Mayhew’s Business Advisory Group offers support to boost your construction company’s performance with outsourced controller and CFO services tailored to your unique needs. Contact our construction CPAs today to learn more.