How tax pros work with controllers vs CFOs

Navigating the complexities of tax planning and compliance requires close collaboration between tax professionals and the financial leadership within a company.

Two key roles tax professionals frequently interact with are the controller and the chief financial officer (CFO). Each role has distinct responsibilities and perspectives that influence how they approach tax-related matters. Understanding these differences is essential for you to effectively support a company’s financial objectives.

Controller vs. CFO: Distinct roles in financial management

Controllers are primarily responsible for the day-to-day accounting functions of a company. They manage the preparation of financial statements, ensure compliance with generally accepted accounting principles (GAAP), and oversee the accuracy of financial records. Controllers are deeply involved in the details of financial transactions, making sure that every aspect of the company’s accounting is accurate and timely.

CFOs, on the other hand, are focused on the broader financial strategy of the company. While they rely on the data provided by controllers, CFOs are more concerned with financial planning, risk management, budgeting, and guiding the company’s long-term financial direction. CFOs work closely with the CEO and the board to align the company’s financial practices with its overall business goals, making high-level decisions about investments, capital structure, and growth strategies.

How they think about tax

Controllers approach tax matters with a focus on compliance and accuracy. They ensure that the company’s tax filings are accurate, timely, and in compliance with all applicable tax laws. Controllers are typically responsible for preparing the necessary documentation for tax returns, maintaining accurate records of all taxable transactions, and working with tax professionals to ensure that the company meets its tax obligations.

CFOs take a more strategic approach to tax planning. They work with tax professionals to develop tax strategies that minimize the company’s tax liabilities and increase cash flow with government incentive programs, while supporting its long-term financial goals. CFOs consider the broader implications of tax decisions, such as how they might impact cash flow, investment opportunities, and the company’s overall financial health. They also focus on tax risk management, ensuring that the company is prepared for any potential changes in tax laws or regulations.

How you an work effectively with controllers and CFOs

Working with controllers:

• Focus on compliance: When working with controllers, tax professionals should prioritize ensuring that all tax filings are accurate and compliant with applicable regulations. Controllers value precision and adherence to standards, so providing clear, detailed guidance on tax compliance is essential.
• Provide detailed documentation: Controllers are detail-oriented and responsible for maintaining accurate financial records. Tax professionals should provide thorough documentation and clear explanations of any tax-related transactions or issues to help controllers keep the company’s financial records in order.
• Collaborate on reporting: Since controllers are responsible for preparing financial statements, it’s important for tax professionals to work closely with them to ensure that tax liabilities are accurately reflected in the company’s financial reports.

Working with CFOs:

• Align tax strategy with business goals: CFOs are focused on the big picture, so tax professionals should work with them to develop tax strategies that align with the company’s long-term objectives. This might include exploring opportunities for tax-efficient investments, managing tax risks, or optimizing the company’s capital structure from a tax perspective.
• Support decision-making: CFOs rely on financial data to make strategic decisions. Tax professionals can add value by providing insights into how different tax strategies might impact the company’s financial performance, cash flow, or growth prospects.
• Monitor tax risks: CFOs are concerned with managing risks, including tax risks. Tax professionals should keep CFOs informed about potential changes in tax laws or regulations that could affect the company and help develop contingency plans to mitigate these risks.

The role is important

Understanding the distinct roles and priorities of controllers and CFOs is crucial for tax professionals who want to effectively support a company’s financial management. Controllers focus on accuracy and compliance, making them key partners in ensuring that tax filings are correct and timely. CFOs, on the other hand, are concerned with strategic financial planning and risk management, so you should work with them to develop tax strategies that align with the company’s long-term goals.

By tailoring their approach to the unique needs of each role, you can build strong partnerships, ultimately helping the company achieve its financial objectives while minimizing tax liabilities and risks.