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The construction industry is characterized by tight profit margins and significant cash flow challenges. Your company’s success depends on strong financial leadership. To meet this need, many contractors reach a point where they should either appoint or hire a controller or Chief Financial Officer (CFO). But 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. There are many other, more minute differences as well.
A construction CFO is responsible for supervising the company’s overall financial operations. Among other things, he or she is entrusted with:
A CFO may also spend time negotiating with lenders and other funding sources, and maintaining relationships with banks and sureties. In addition, he or she will help with the company’s technology purchasing decisions.
So how do you know when you need a controller or CFO? Well, 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 look into 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 EFA CPAs and other professional advisors. We can provide critical support to you and everyone on your construction company’s management team, contact us today.
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