Some business owners use the two interchangeably, but their skillsets are very different. A Controller is usually focused on day to day accounting tasks. Things like reconciling bank accounts; invoicing; paying bills; collecting accounts receivable; and producing financial statements. A CFO, on the other hand, is usually focused on strategic financial management and complex analysis of the business. Things like: financial forecasts; cash flow forecasting; pricing strategy; P&L management; Profit maximization; 3 year plans; investor presentations; and deciding when to add a new facility. Very seldom do you find someone who can do both things well (or likes to do both). So which is more important?
In most cases the Controller should come first because you must do the basic accounting and financial tasks in order to keep the business running. If you don’t invoice, pay your bills and collect from your customers, you won’t be in business very long. But as the business grows and becomes more complex, an experienced CFO will more than pay for himself (or herself) by making decisions that often have dramatic impact on the future performance of the business.
Unfortunately, by the time you know you need a CFO (and can afford one full time) you may have already made business decisions that will cost you hundreds of thousands of dollars or more. That’s why a Fractional CFO is such a great value. You get the expertise early in the game when it can make a big difference, without having to pay for a full time CFO (which isn’t cheap).
So hire a great Controller first. Then, as your business grows and gets more complex consider a fractional CFO until you reach the point where you are ready to hire a full time CFO.