I am often asked, “A CFO and controller are the same thing, aren’t they?” Or it might be, “Isn’t a controller a lower paid chief financial officer?” The question generally comes from a business owner. In general, an entrepreneurial company might have one position or the other (unlike their big company counterparts which usually have both positions).

In many cases, a person might have the title of CFO but not the skill set. I recently met a business owner who said that his top financial person was a controller. An appropriate title I thought. I learned that the person was going to school at night to get their bachelors degree in accounting. They had been with the Company for a number of years and their salary was such, that a “bigger” title was needed to justify the amount. Don’t get me wrong, the person was very capable at making journal entries and making sure that the month end depreciation was posted to the books. However, they didn’t have the experience or training to deal with some of the strategic issues that the $20+ million business was facing, e.g., creating a business plan needed for a loan extension from the Company’s bankers.

So what exactly makes a chief financial officer different? Think of your business as a car traveling down the highway. When the controller is driving, he or she is constantly looking in the rear view mirror seeing what has already gone by. Many duties of a controller might be similar. They are concerned with the day to day mechanics of the accounting department. Was the payroll processed? Did the accounts payable clerk record the vendor invoices received last week? And so on…

Although a CFO needs to look in the rear view mirror once in a while, they are more focused on the road ahead. They are looking to see if there are any potholes in the highway to steer around. Are there detours to be navigated? During a long road trip, he (or she) is looking at a map to determine the easiest (a/k/a least expensive) and best route to take. Think of a business plan as being the road map for your business. There are going to be bumps in the road and modifications to your plan will be needed. If your staff and advisors have been down that road before, the trip will be much more enjoyable.

If you need assistance driving your business to your next destination, call Ed Baloga, a New York based partner with B2B CFO® at 914.474.9547 or via email at ebaloga@b2bcfo.com.