Differences Between an FC and FD

You’ve most likely heard of a Finance Director (FD), but have you heard of a Financial Controller (FC)? In finance and business, FC stands for Financial Controller and FD stands for Finance Director — two senior finance roles that sound similar and often get confused, but differ in seniority, focus and responsibility. 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 Finance Director and anyone else who may need it. The Financial Controller also works closely with the accounting team, and other departments in your business working with finances.

A Finance Director works on and implements strategies to help further the company’s or business’s financial goals. Finance 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 Finance Director most often reports to the CFO or CEO, while the Financial Controller reports directly to the FD. You might be interested in FD Headhunters.

Differences and Similarities Between an FC and FD

While it may seem like they are two people who fulfil similar roles, there are also quite a few differences. On a very basic level, Finance Director is a leadership role and therefore carries a higher salary than Financial Controller. Another role of Finance Directors is to establish and create new relationships that benefit the company financially, like banks; while the Financial Controller helps maintain the current financial relationships.

In other areas, the Financial Controller oversees accounting-type jobs like bills, payments and reconciliations, while the Finance Director helps with other aspects that impact the financial standing of your company, like what parts 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, analyses the data, and interprets them in terms of what strategies can be implemented in order to increase profit or maintain the current growth.

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.

Financial Controller vs Finance Director: The Key Differences at a Glance

The clearest way to see the difference between a Financial Controller and a Finance Director is side by side:

Put simply: the Financial Controller makes sure the numbers are right; the Finance Director decides what the business should do because of them. In a well-built finance function the two roles are complementary rather than interchangeable — and in many growing businesses the FC is the natural successor to the FD, a progression we cover in our guide to moving from Financial Controller to Finance Director.

Gap Between the FC and FD — How to Bridge

Ideally, you’d have an exceptional finance department that holds space for a Financial Controller, Finance 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 isn’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 Finance 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 strategise 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 finance 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 Finance Director. Full-time Finance 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 Finance 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 Finance Director can help you raise funds and capital and can use their network to help you gain traction. When you have up to £10 million in sales, both an FC and a 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.

FD Capital

At FD Capital we enjoy helping and supporting your business in its financial pursuits. We recruit Financial Controllers, Finance Directors and CFOs for UK businesses — permanent, interim, part-time and fractional. 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 or FD can help create that missing transparency and clarity.

Adrian Lawrence

Adrian Lawrence FCA is the founder of FD Capital and a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW). He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience as a Chartered Accountant and finance leader working with private, PE-backed and owner-managed businesses across the UK. He founded FD Capital to connect growing businesses with the Finance Directors and CFOs they need to scale — and personally interviews candidates for senior finance appointments.