4 Powerful Tips for SaaS Finance Controllers to improve FinOps Efficiency

A controller will hand over the income statement, balance sheet, cash flow, A/P aging, A/R aging, and inventory sheets to the CFO. Their job is to then turn that information into five to ten primary operational metrics of past performance to help guide future decisions. Often this is done with enough lead time that the necessary staff can take steps to impact future performance. Furthermore, a successful CFO must understand the legal landscape of their industry and be able to direct significant resource investments. SaaS firms have different accounting practices, financial metrics and growth stages than other business types.

It’s helpful to understand the unique nature of SaaS CFO duties, so you can hire accordingly. By boiling down their financial KPIs to these seven, CFOs are able to serve the business by engaging with other functional areas, such as marketing, sales, customer success, and finance. Chris advises leadership teams to review these on a quarterly basis, see how you’re measuring your budget vs. actuals, identify any forecasting errors, and adjust accordingly.

Two signs you need a CFO

The skill sets of chief accounting officers and controllers are complementary, as both ultimately work in tandem to support the CFO. CFOs and financial controllers may have overlapping responsibilities within a company, CFO vs Finance Controller: Whom Does your SaaS Business Need? but they each have specific roles that differ from one another. This can be confusing for business owners who are trying to figure out which position they need to fill to best manage their company’s finances.

The CFO’s duties include financial planning and tracking cash flow as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions. An early-stage company may appoint one person to handle the financial controller and CFO roles. However, the need for dedicated professionals in each role becomes more apparent as the business grows.

What Size Companies Use a Financial Controller?

A controller is a tactical position responsible for compliance and reporting, whereas a CFO is a strategic leader responsible for all financial tasks including forecasting, planning and analysis. Controllers often do not make good CFOs, as they lack the out-of-the-box thinking required to innovate financial strategy; whereas CFOs often lack the discipline and rigor required to be a good controller. Hiring a CFO can be a long, involved, and costly process, with the risk of a mis-hire weighing on you at each stage.

• A controller is a company executive that is responsible for all the organization’s accounting activities.
• We often see commonalities with controller roles based on the annual revenue of the company.
• CFOs focus is on long-term strategic financial planning and growth working closely with the CEO; they make decisions based on analysis of the accounting department as well as the sales and marketing departments.
• SaaS CFOs must be well-versed in ASC 606, the 5-step revenue recognition standard for businesses entering into contracts to transfer goods or services to customers.
• A factional CFO and fractional controller is a complete solution for most small businesses.
• Controllers, who are sometimes called comptroller’s, supervise bookkeepers, tax managers, credit managers, and other accounting staff while reporting to the CFO, CEO or business owner directly.

According to various studies, this revenue threshold typically falls between $40 million and $100 million. According to a study by The Association of Accountants and Financial Professionals in Business, the role of a Financial Controller has become increasingly strategic and essential in the last ten years. The evolving role of the Financial Controller necessitates a shift from traditional responsibilities to more strategic and technological ones, highlighting the need for continuous adaptation and upskilling. Let’s dive deeper into the roles, responsibilities, and evolving expectations for a CFO vs Controller. They have experience working for several SaaS firms and can help you cross the first two levels of the financial hierarchy of needs. It is pretty similar to our hierarchy of financial needs, but it deals with company needs and not individuals’ developmental needs.

Stage 2: Building a profitable, repeatable sales process

These pillars represent opportunities for CFOs to optimize business performance and improve their company’s financial position. Then, after establishing that this pressing need does exist, you must act deliberately — and, remember, you’re not merely hiring for today’s challenges, but also tomorrow’s. Stricter regulatory requirements, globalization challenges and rapidly evolving technologies https://quickbooks-payroll.org/ and industries have forced CFOs to further incorporate broader perspectives and innovation. Here’s a brief comparison between the CFO and financial controller scope, day-to-day responsibilities, and evolving expectations. “The tone at the top plays a key role in ensuring how well the finance function influences other departments and processes,” – Mike Beach, CFO, Chargebee.

• Controllers spend most of their time in the trenches making sure ledgers are accurate and systems are working properly.
• Close the books 4x faster, collect over 95% of receipts on time, and get 100% visibility over company spending.
• With high-quality outsourced accounting services, business owners can leverage the power of a robust, fully functioning back office while only paying for the services, time, and people that are actually needed.
• There are always additional roles and responsibilities that are industry-specific.
• As your SaaS business grows, your finance and accounting capabilities are being stretched thin.
• In terms of duties and responsibilities, there is no practical difference between the two titles.

When it comes to a small business’s finance and accounting needs, there is often confusion about when to hire a financial controller vs. a CFO. While both roles are essential for any organization’s financial stability, there are fundamental differences between the two job titles. A financial controller is typically responsible for managing the company’s day-to-day accounting operations, including accounts payable/receivable and payroll.

However, the differences between a controller vs CFO are important and a clear distinction between the two can provide value that has not previously been realized. The Controller plays a critical role in maintaining organizational financial health by providing accurate information needed to make sound business decisions that effect profits or losses. They must be able to provide timely insights into changing economic conditions that can impact day-to-day operations.

Check out our SaaS Finance Ops Maturity Model which prescribes the ideal workflow at each stage of growth of your SaaS. Relying on spreadsheets as you continue to scale is a short-term approach that soon leads to disconnected sources of data, missed insights, misalignment among business functions, and ultimately, poor and delayed decisions. At the early stages of a SaaS startup, the priority is to acquire as many customers as possible and to improve the adoption rate.