You didn’t go into business to create spreadsheets and worry about balancing books. You went into business to bring your talents to the world and help people. As a new and growing business, you were likely able to keep up with your finances. It may not have been enjoyable work, but it was doable.
However, as you grow, the time necessary to keep your finances straight begins to take away from the time you could be using to bring in more customers, develop new products, service your existing clients, and scale your operation.
Maybe you’ve noticed that your financial reports are not precise, or they take too much time to generate. Perhaps you’re experiencing a challenge with your cash flow or having a difficult time determining what metrics matter to the future of your business. You may have a bookkeeper watching over your books, but no accountant utilizing this data. If any of this sounds familiar, it may be time to hire a financial leader and take the burden off your shoulders.
Need help with managing your business finances?
Contact Larry L. Bertsch, CPA & Associates, LLP today!
The Differences Between an Accountant, a Controller, And a CFO
Once you’ve ascertained that it’s time to bring on some assistance for your small business accounting, your next questions will center around who you’ll need and for what tasks. While your specific needs will vary depending on the size of your business, how your business runs, what your goals are, and who you have working with you now, you’ll want to have a basic understanding of who is out there and what they can do for your business.
Let’s take a look at the potential financial support you can bring on:
- Bookkeeper
- Accountant
- Controller
- CFO
A Bookkeeper keeps your business’s finances in order
A bookkeeper keeps your business’s finances in order. As a new business owner, you may have taken on this responsibility yourself or asked a friend or family member to assist you. A bookkeeper can be employed by the business or can be an outside vendor hired to assist you. While the right bookkeeping software can make life considerably easier, the list of a bookkeeper’s tasks is still quite lengthy.
They include:
- Data Entry and capture transaction details for your bank accounts.
- Post financial transactions in bookkeeping software or spreadsheets for easy reference
- Generate financial reports including balance sheets and income statements
- Report and reconcile any discrepancies
- Create and pay invoices
- Do payroll
- File your business’s tax returns.
An Accountant helps you make sense of your business’s financial data and make educated financial decisions
An Accountant may keep your books, serving as a bookkeeper or they may oversee a bookkeeper. However, they do quite a bit more as well. An accountant will use the records created during bookkeeping to help you assess your business and make educated financial decisions moving forward. You may want to hire internally for this function or utilize an outside service.
Their responsibilities may include:
- Creating your set of books
- Overseeing the bookkeeper or handling the bookkeeper’s function themselves
- Utilizing the information from the bookkeeper to prepare reports for internal users (budgets, inventory and cash flow analysis, cost projections) and external users (reports for potential lenders or investors, government agencies, etc.).
A Controller oversees your internal accounting department as you scale
A Controller is a senior-level of executive inside of your company. They act as the head of accounting and would supervise a bookkeeper and accountant. A financial controller is responsible for overseeing the daily accounting operations and helping to guide strategic financial decisions.
Their day-to-day responsibilities include:
- Preparing financial reports
- Doing compliance audits
- Monitoring internal controls
- Analyzing financial data
- Being a part of the budgeting process.
Your CFO sees the big picture for your business’s overall financial strategy
A Chief Financial Officer is a C-suite executive who manages the financial actions of a company. They have a similar function as a Controller, however, he or she is also responsible for fundraising and creating the finance strategy for the organization.
Responsibilities include:
- Managing the finance and accounting departments for the company
- Accurate and timely financial reporting
- Tracking cash flow
- Reconciling income and expenses
- Analyzing strengths and weaknesses
- Creating an overall financial strategy
- Fundraising.
Which Does My Business Need?
Every business is different and who you hire to help you get (and keep) your finances in order, will depend on your specific situation. As a guideline, you’ll want to look for a controller if you need someone to watch over the bookkeeper and the rest of your accounting department, coordinate with the company’s tax preparers and external auditors, and provide more accurate financial records.
On the other hand, a CFO is the right hire if you need more than just good accounting records, you need assistance with forecasting, mergers and acquisitions, taking your company public, etc. They can help you during periods of transition and scaling your business.
If your company is doing more than $50 million in revenue, you’ll likely want to hire a Controller and hire a CFO to handle all of these functions.
When Should My Business Hire a Financial Leader?
A growing business is a beautiful thing. However, you’re likely experiencing a few pains along the way. Having a bookkeeper and even an accountant on staff or utilizing an external firm is definitely a step above doing it yourself. This will work for a while (and indefinitely for some small businesses), but it may not work for everyone. If you are experiencing any of the following challenges in your business, it may be time to hire a financial leader:
- You receive inconsistent answers to your financial questions
- You don’t believe the answers to be entirely accurate
- You don’t receive answers at all
- Reports are being brought to you late (if you get them at all)
- Reports are nearly impossible to read and are missing important data
Do any of these reflect your current situation? It may be time to float a new position at your company.
What Should I Look For in a Financial Leader?
Whether you choose to hire a controller or a CFO, there are certain characteristics you’ll want to look for. Obviously, a financial leader must know their way around business accounting and finance, however, they’ll also need other skills such as:
- Excellent business acumen and knowledge of the ins and outs of daily business operations
- Speaking both “accounting” and “normal speak” so they can translate complex ideas into simple terms for their audiences
- Leadership skills so they can manage their teams and create a unified department working for the good of the organization
- Problem-solving skills and big picture thinking as they will be helping to make decisions that impact the company’s future.
Like any other hire, this individual will be interacting with your other employees and must be able to work well with the team. Because of this, finding a good culture fit is important as well.
Looking to Outsource Your Accounting Services?
Hopefully, you now have a good idea of what will help make your life easier, and take your business into the future. If you aren’t ready to hire someone in-house and would like to outsource some of your accounting responsibilities, Las Vegas CPA Firm, Larry L. Bertsch, CPA & Associates can help. Contact us today and take the burden off your shoulders.
