A controller keeps the books accurate and on time. A CFO decides what the numbers mean for the company's cash and its growth, and sits with the CEO when the big calls get made.
Most growing companies need a controller first. The harder question is when the controller stops being enough.
The short version
| Controller | CFO | |
|---|---|---|
| Owns | Accounting: the monthly close and the accounting team | The company's finances: cash, capital, risk and planning |
| Looks at | The last month and the current year | The next 1 to 5 years |
| Outside relationships | The outside CPA and auditors | The bank, the surety, investors and buyers |
| Reports to | Usually the CFO, or the owner if there is no CFO | The CEO or owner, often the board |
| A good one tells you | Exactly where the company stands | What to do about it |
In a smaller company, one person often does both jobs. That works until the company outgrows it, and the signs are usually easy to spot once you know them.
Signs you need a controller
These are accounting problems, and a good controller fixes them.
- The books close weeks after the month ends, or the close keeps slipping.
- The owner, or the owner's spouse, is still doing a real share of the accounting.
- The outside CPA spends the first months of every year cleaning up.
- In construction, the team doesn't fully trust the WIP schedule, and job cost reports come too late to change anything on the job.
- In home services, each location reports a little differently, so the numbers can't be compared.
If that list sounds like your company, hire a controller before you hire a CFO. A CFO built on unreliable books spends the first year doing a controller's job at a CFO's salary.
Signs you need a CFO
These problems are about decisions, and the books being right doesn't solve them.
- The bank or the surety is asking harder questions. In construction, bonding capacity often decides how big a job you can bid. The person who presents your numbers to the surety needs to be someone they trust.
- You can't see cash 12 months out. A profitable company can still run short of cash on a big job with slow pay apps.
- Growth needs capital. A second location, an acquisition, new equipment or a line of credit all need someone to model the options and negotiate the terms.
- Private equity has called. A platform company, or an owner talking to buyers, needs a finance leader who can run a sale process or report to a board.
- The owner is planning to step back. Succession and the finance seat are tied together. A buyer or a successor will want to see a finance function that doesn't depend on the founder.
Can your controller become your CFO?
Sometimes, and it's worth considering first because they already know your business.
Ask whether they have owned an outside relationship, like the bank or the surety, and held it under pressure. Ask whether they bring you decisions or reports. A controller who brings you options with a recommendation is already doing part of the CFO job.
If the honest answer is no, promoting them anyway is a common way to lose a good controller and gain a struggling CFO.
Where a fractional CFO fits
A part-time or fractional CFO can bridge the gap. It works well when you need CFO judgment for a specific project, like a refinance or preparing for a sale, and a strong controller runs the day to day.
It works less well when the company needs someone in the building every week, sitting with the operations team and owning the surety relationship over years.
How to hire each one
Controllers are usually easier to find. The role draws strong applicants and the skills are easy to judge from a resume, so your own team or a contingency recruiter can often fill it well. A retained search is hard to justify for most controller hires.
A CFO is a different search. The good ones are already running finance somewhere else and aren't looking.
In construction the pool is smaller again, because construction accounting is its own discipline: percentage-of-completion revenue, job costing, over and under billings and bonding capacity. A CFO from another industry learns all of it on your money.
That's why most companies use a retained search for the CFO seat. We've written about how retained and contingent search compare, and what we look for in a construction finance leader is on our construction CFO search page.
Before you decide
Write down the 3 financial decisions you'll face in the next 2 years. If the answers are mostly "close faster and report accurately," you need a controller. If they're about banks, bonding, capital or a sale, you need a CFO.
If you're weighing a CFO hire, talk to our team. We'll tell you plainly if a controller is the better next step.