Fractional CFO vs Controller vs Bookkeeper: Understanding the Differences
A clear breakdown of finance roles to help founders understand what each position does and which roles their startup actually needs.
Bookkeeper. Controller. CFO. These titles get thrown around a lot, and it's easy to confuse what each role actually does. As a founder, understanding the differences is crucial for building the right finance function for your startup.
Many founders make the mistake of hiring a bookkeeper when they need a CFO, or expecting CFO-level work from someone in a bookkeeping role. This guide clarifies each position so you can make informed decisions about your finance team.
The Simple Version
Bookkeeper: Records what happened (transactions)
Controller: Makes sure it's accurate and compliant (accounting)
CFO: Figures out what it means and what to do (strategy)
Role Overview
Think of finance roles as a pyramid. Each level builds on the work of the level below, with increasing strategic responsibility as you move up.
CFO (Strategic)
Sets financial strategy, advises on business decisions, manages investor relations, leads fundraising, and drives value creation
Controller (Managerial)
Ensures accuracy of financial statements, manages close process, maintains internal controls, oversees compliance and reporting
Bookkeeper (Transactional)
Records transactions, categorizes expenses, reconciles accounts, processes payables and receivables, maintains day-to-day books
What a Bookkeeper Does
A bookkeeper handles the transactional, day-to-day recording of your company's financial activities. They're the foundation of your finance function.
Bookkeeper Responsibilities
Transaction Recording
- Entering and categorizing expenses
- Recording revenue and invoices
- Processing accounts payable
- Managing accounts receivable
- Tracking and recording payroll entries
Reconciliation
- Bank statement reconciliation
- Credit card reconciliation
- Vendor statement matching
- Intercompany reconciliation
Administrative
- Maintaining chart of accounts
- Filing and organizing documentation
- Running basic financial reports
- Supporting tax preparers with documentation
Typical Background
- Associate's or Bachelor's degree
- Bookkeeping certification
- 2-5 years experience
- QuickBooks/Xero proficiency
Cost Range
- In-house: $40K-$70K/year
- Outsourced: $500-$2,500/month
- Hourly: $25-$50/hour
When You Need a Bookkeeper
Every company needs bookkeeping from day one. Whether you do it yourself, hire someone, or outsource it, transactions need to be recorded accurately. Most seed-stage startups use an outsourced bookkeeping service.
What a Controller Does
A controller is a senior accounting professional who ensures the accuracy and integrity of your financial records. They're the "chief accountant" who owns the numbers.
Controller Responsibilities
Financial Reporting
- Preparing monthly financial statements
- Ensuring GAAP compliance
- Managing the month-end close process
- Revenue recognition oversight
- Preparing management reports
Internal Controls
- Designing and implementing controls
- Establishing approval workflows
- Segregation of duties
- Audit preparation
Team Management
- Supervising bookkeeping staff
- Reviewing and approving journal entries
- Managing external accountants
- Process improvement
Compliance
- Tax filing coordination
- Regulatory compliance
- Audit support
- Policy development
Typical Background
- Bachelor's or Master's in Accounting
- CPA certification (usually)
- 7-15 years experience
- Public accounting background common
Cost Range
- Full-time: $120K-$200K/year
- Fractional: $3,000-$8,000/month
- Hourly: $100-$200/hour
When You Need a Controller
Most startups don't need a dedicated controller until they hit $5-10M in revenue or have complex accounting needs (multi-entity, complex revenue recognition, international). Before that point, a fractional CFO can provide controller-level oversight of your bookkeeping.
What a CFO Does
A CFO is a strategic executive who uses financial data to guide business decisions. They're focused on the future, not just recording the past. For more details, see What Does a Fractional CFO Do?
CFO Responsibilities
Strategic Planning
- Financial modeling and forecasting
- Scenario planning and analysis
- Capital allocation strategy
- Business model analysis
- Pricing strategy input
Fundraising & Investor Relations
- Fundraising strategy and execution
- Investor presentations and data rooms
- Due diligence management
- Board meeting preparation and attendance
- Ongoing investor communication
Business Partnership
- Advising CEO on financial implications of decisions
- Supporting department heads with financial planning
- M&A evaluation and execution
- Contract negotiation support
Finance Leadership
- Building and leading the finance team
- Setting financial policies and procedures
- Selecting and implementing financial systems
- Risk management
Typical Background
- MBA or advanced degree common
- 15-25+ years experience
- Investment banking, Big Four, or startup CFO experience
- Industry-specific expertise
Cost Range
- Full-time: $250K-$500K+/year
- Fractional: $3,000-$12,000/month
- Project: $10K-$50K
When You Need a CFO
You need CFO-level thinking earlier than you might expect—usually once you've raised a seed round or are preparing to raise. A fractional CFO is the right solution for most seed and Series A startups who need strategic finance leadership without the full-time cost.
Side-by-Side Comparison
| Attribute | Bookkeeper | Controller | CFO |
|---|---|---|---|
| Primary Focus | Transactions | Accuracy & Compliance | Strategy & Decisions |
| Time Orientation | Past (recording) | Past & Present (reporting) | Future (planning) |
| Key Questions | "What happened?" | "Is it accurate?" | "What should we do?" |
| Typical Experience | 2-5 years | 7-15 years | 15-25+ years |
| Common Credential | Bookkeeping cert | CPA | MBA, CPA, or neither |
| Full-Time Cost | $40K-$70K | $120K-$200K | $250K-$500K+ |
| Fractional Cost | $500-$2,500/mo | $3,000-$8,000/mo | $3,000-$12,000/mo |
| Board Interaction | None | Provides data | Presents & advises |
| Fundraising Role | None | Supporting | Leading |
Who Handles What?
| Task | Bookkeeper | Controller | CFO |
|---|---|---|---|
| Record expenses | |||
| Bank reconciliation | |||
| Month-end close | |||
| Financial statements | |||
| Financial model | |||
| Budget vs. actual | |||
| Board deck | |||
| Fundraising prep | |||
| Strategic decisions |
What Does Your Startup Need?
The roles you need depend on your company's stage, complexity, and immediate priorities.
Pre-Seed / Early Seed
$0-$1M raised, <5 employees
Need: Bookkeeper
Outsourced bookkeeping is usually sufficient
Maybe: Fractional CFO
For seed fundraising prep
Don't Need: Controller
Not yet complex enough
Seed / Pre-Series A
$1M-$5M raised, 5-20 employees
Need: Bookkeeper
Outsourced or part-time in-house
Need: Fractional CFO
For strategy, board, and Series A prep
Don't Need: Controller
CFO can oversee bookkeeper
Series A
$5M-$15M raised, 20-50 employees
Need: Bookkeeper
May need full-time or more hours
Need: Fractional CFO
Strategic leadership essential
Consider: Controller
If complex accounting needs emerge
Series B+
$15M+ raised, 50+ employees
Need: Bookkeeper/Staff
Full-time accounting staff
Need: Controller
Full-time controller often needed
Consider: Full-Time CFO
May be time to transition from fractional
Building Your Finance Team
Most startups build their finance team in stages. Here's a typical progression:
Start: Outsourced Bookkeeping
Nearly every startup begins with outsourced bookkeeping. Services like Pilot, Bench, or local CPA firms handle transactions for $500-$2,000/month.
Add: Fractional CFO
Once you raise a seed round or are preparing for one, add a fractional CFO for strategic oversight. They work with your bookkeeper and handle everything strategic. See our pricing guide for costs.
Evolve: Upgrade Bookkeeping
As complexity grows, you might need more bookkeeping hours, a part-time in-house bookkeeper, or a more sophisticated outsourced service.
Add: Controller (When Needed)
If you have complex revenue recognition, multiple entities, or are preparing for audit, consider adding a controller. This can be fractional initially.
Transition: Full-Time CFO
Post-Series B or when complexity demands it, transition from fractional to full-time CFO. Your fractional CFO can help with this transition and even recruit their replacement.
Common Mistakes
Here are mistakes founders commonly make when building their finance function:
Expecting CFO Work from a Bookkeeper
A bookkeeper records transactions; they can't help you with financial models, fundraising strategy, or board presentations. These are fundamentally different skills.
Hiring a CFO Before Having Clean Books
A CFO needs accurate data to provide strategic value. If your books are a mess, fix bookkeeping first. Otherwise, your CFO will spend time on cleanup instead of strategy.
Waiting Too Long for Strategic Help
Many founders wait until they're in crisis to get CFO-level help. By then, they've made avoidable mistakes. Get strategic finance help before you desperately need it.
Confusing CPA with CFO
Your CPA handles tax compliance and may offer some advisory. But a CPA firm is not a substitute for ongoing strategic finance leadership from a CFO.
Over-Hiring Too Early
You don't need a full-time controller or CFO at the seed stage. Fractional resources give you the expertise without the overhead.
The Right Approach
For most seed and Series A startups: outsourced bookkeeping + fractional CFO. This combination gives you clean books AND strategic leadership at a fraction of the cost of building an in-house team.
Related Articles
Complete Guide to Fractional CFO Services
Everything you need to know
What Does a Fractional CFO Do?
Day-to-day responsibilities
How Much Does a Fractional CFO Cost?
Pricing guide for startups
Fractional CFO vs Full-Time CFO
Which is right for you?
Need Strategic Finance Leadership?
Eagle Rock CFO provides fractional CFO services for seed and Series A startups. Get the strategic guidance you need alongside your existing bookkeeping.
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