Is Your Construction Company in Need of a Controller or CFO?
Similar to numerous other industries, the construction industry can significantly benefit from including a controller or chief financial officer (CFO) on board due to the unique financial and operational challenges the industry faces. A company’s success depends on strong financial leadership to meet accounting needs and keep everything in order. While controllers and CFOs are related in skills, their roles and responsibilities differ. It’s important to understand the differences between the two roles to assess what construction companies need.
Responsibilities of a Controller
Most controllers are certified public accountants (CPAs) and tend to focus on what is happening now at a construction company. They handle the basic day-to-day duties as well as tracking and reporting the company’s financial health. These tasks include, but are not limited to:
- Reviewing and processing payroll and related tax filings
- Performing accounting, bookkeeping and basic cash-flow tasks
- Overseeing accounts receivable and payable
- Developing daily, weekly or monthly financial reports
- Debt management and collection
- Composing month-end financials and other book-closing tasks
- Assisting with tax preparation
- External reporting including tax and Generally Accepted Accounting Principles (GAAP) financial statements
- Fraud prevention and fielding questions pertaining to the company’s accounting software
Responsibilities of Chief Financial Officer (CFO)
While controllers are more accounting and tactical based, CFOs tend to be more strategic, and finance based. They are focused on the future of the company and are the ones who develop solutions to improve the company’s overall financial performance. Some of a CFO’s responsibilities include, but are not limited to:
- Leading all financial operations
- Negotiating bank and insurance contracts
- Reviewing all contracts before signing for financial impact to the company
- Generating budgets and forecasts
- Analyzing monthly financial statements
- Overseeing tax planning and strategy
- Assisting with the company’s purchasing decisions
- Establishing policies and procedures to ensure the integrity and accuracy of management reports
- Representing the company in external financial matters
- Taking responsibility for automation and other technology efforts
When Is the Right Time to Hire a Controller or CFO?
It is important for the owner of a construction company to assess if a controller or CFO is needed for their company. If a construction company has neither of these positions filled, it’s highly likely that these responsibilities are falling on the shoulders of the owner or other employees. If the company is rapidly growing, it may be time to look into hiring a controller.
If a construction company already has a controller that is at capacity with the work that they have, then it might be time to start looking for a CFO. If the company does not have the financial resources to hire a full-time CFO, then outsourcing CFO services may be in their best interest. Construction companies of all sizes can work with an outsourced CFO who will provide them with a transparent picture of their operations based on accurate, up-to date financial data and benchmarks.
Overall, hiring a controller or CFO can play a crucial role in a construction company by providing financial expertise, managing risk, optimizing financial operations and helping the company make informed strategic decisions. Their presence can lead to better financial outcomes and long-term success.
If you have any questions about CFO/Controller services or are interested in outsourced CFO/Controller services, contact the Brown Plus team today!