Differences Between an FC and FD
Differences Between an FC and FD
You’ve most likely heard of a Financial Director (FD), but have you heard of a Financial Controller (FC)? These two may sound similar in terms of their roles and responsibilities, as they are both in the financial sphere of a company or business; however, they do differ in quite a few ways. Read on to understand the similarities and differences between an FC and FD.
The Basics
Many companies may not actually have separate roles between the FC and FD. Many businesses will essentially have the FD take over most of the financial responsibilities, including those normally delegated or associated with the role of an FC.
A Financial Controller is responsible for the operational side of finances. They look at the data, and how it’s trending historically. For financial reports, an FC gathers all of the data and then distributes that report to the Financial Director and anyone else who may need it. The Financial Controller also works closely with the Accounting Department, and other departments in your business working with finances.
A Finance Director works on and implements strategies to help further the company’s or businesses’ financial goals. Financial Directors make sure that a company or business hits its financial goal of the month, quarter and year. They track these and communicate with different departments to make this happen. The Financial Director most often reports to the CFO and CEO, while the Financial Controller reports directly to the FD. You might be interested in FD Headhunters.
Differences and Similarities FC and FD
While it may seem like they are two people who fulfill similar roles, there are also quite a few differences. On a very basic level, Finance Directors are a leadership role and therefore have a higher salary than Financial Controllers. Another role of Finance Directors is to establish and create new relationships that benefit the company financially, like banks; while the Finance Controller helps maintain the current financial relationships.
In other areas, the Finance Controller overlooks accounting-type jobs like bills, payments, etc. while the Finance Director helps with other aspects that impact the financial standing of your company, like what aspects of the business must be adapted in order to reduce costs and increase profit.
FCs and FDs work closely together. The best showcase of their collaborative efforts is that an FC creates and brings reports to the FD, who then looks at those reports, analyzes the data, and interprets them in terms of what strategies can be implemented in order to increase profit or maintain the current growth. You might be interested in: Meet the 21st Century Finance Department the future of the function
However, both FCs and FDs also work in the same department, are crucial in the process of helping the business thrive financially, invest time into relationships with financial institutions in the interest of your business, and work together on the same goal – your company’s growth.
Gap Between the FC and FD – How to Bridge
Ideally, you’d have an exceptional financial department that holds space for a Financial Controller, Financial Director, and Chief Financial Officer. It’s important, as with every position, to make sure that each person is doing exactly what they are supposed to do and aren’t fulfilling responsibilities that they aren’t suited for. This isn’t a good use of your time and resources or their skill set.
Having a Financial Controller take over roles and responsibilities that a Financial Director normally would have, isn’t serving you or them and is an often occurring problem. The challenge of doing this is that it doesn’t allow you as a business owner to understand and get an accurate picture of your business’s financial standing.
Every business aims for growth, and with growth comes complexity. This complexity is not helpful when you don’t have a support team that can help you make use of the data that you have, or help you strategize on how to best handle the growth, sustain it, and even possibly exceed it. Therefore these two roles are extremely important.
At What Stage In Your Business Are Either or Both of These Necessary
There are some things to consider when looking to expand your financial department and team. There is a right time and a wrong time to hire, and you want to get it right. Doing it at the wrong time can mean wasting your precious resources – both time and money. It can also create unnecessary tension between you and whoever you hire.
First off, one way to make sure you have the best use of your resources is to hire a part-time Financial Director. Full-time Financial Directors are often not feasible as a justifiable expense for smaller or midsize companies and it’s, therefore, a great in-between strategy to hire a virtual or part-time Financial Director. Often there is little need for a full-time FD from a time perspective as well, as there isn’t enough work for them to do at a smaller scale. Getting the balance between FC and FD right is a key factor.
When your business is not making any profit yet, a part-time Financial Director can help you raise funds and capital that can use their network to help you gain traction. When you have up to $10 Million in sales, both an FC and part-time FD are useful to have on hand. They can still help you with fundraising, as well as help create that transparency and clarity when it comes to your numbers. When you’re making between £10 and £40 Million in sales, it’s time to switch to a full-time FD. At this point your sales are so significant that you’ll overwhelm a part-time FD and need to make the transition to a full-time one.
You might also enjoy our article about the finance department in the 21st Century, and how its shape is evolving to meet the changing requirements.
FD Capital
At FD Capital we enjoy helping and supporting your business in its financial pursuits. We offer to recruit and hire the right CFO or FD for your business. We know that it can be frustrating and difficult to get the bigger picture of where your business is going financially, so we take finding the right FC or FD for you seriously. It’s difficult for businesses to grow if there is no transparency and clarity around the current status of your business. Hiring an FC orFD can help create that missing transparency and clarity.
Call us today for a no obligation initial discussion
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Adrian Lawrence FCA with over 25 years of experience as a finance leader and a Chartered Accountant, BSc graduate from Queen Mary College, University of London.
I help my clients achieve their growth and success goals by delivering value and results in areas such as Financial Modelling, Finance Raising, M&A, Due Diligence, cash flow management, and reporting. I am passionate about supporting SMEs and entrepreneurs with reliable and professional Chief Financial Officer or Finance Director services.
