BOOKKEEPER, CPA, CONTROLLER, CFO? WHAT DO I NEED?
Selecting the right financial professionals for your company depends on your size, scope, and ambition.
No matter how exciting your company’s product or service may be, in the end, someone needs to crunch the numbers. A business poised for growth needs a team of highly skilled professionals ready to steward your financials. But what are the roles, which does your company actually need and how do you choose the “right” financial professionals? The short answer: it depends.
Even just starting out, a company needs to understand its numbers. What is your actual cash flow? What products or customers return the greatest profit? What’s the fastest way to grow those figures?
Some think they can pay a bookkeeper the bare minimum and expect him or her to function as a “cheap” Chief Financial Officer (CFO). Others hire a CFO right out of the gate to run everyday accounting operations or expect a certified public accountant (CPA) who does yearly taxes to act as a strategic advisor. Often, none of these solutions ultimately give the business what it needs – and can lead to an unnecessary waste of time and resources.
If it’s helpful, envision your company as the newest team in the NFL. In order to make it to the Super Bowl of financial management, you need a complement of talent that fits your size and ambitions.
The Defensive Line = Bookkeeper
The bookkeeper (or in some cases, staff accountant) is typically a more junior staff member. They take direction from higher-ups in the organization and keep the day-to-day accounting functions of the company running smoothly. These can include accounts receivable (AR) and accounts payable (AP), reconciliation of bank accounts, invoice payment, and proper filing and classification of transactions. They keep an eye on what’s come before to make sure the books are balanced.
Your team is sunk without an effective defensive line. All it takes is a few missed payments or an improperly maintained ledger for debt collection to break through and sack the quarterback. As your business grows, however, you may soon see the limit to their abilities and capacity. A three-employee shop is a very different animal than one with 30.
The Place Kicker = CPA
Many companies also enlist the services of a Certified Public Accountant (CPA), who assists with general financial upkeep and plays a crucial role during tax season. But many businesses don’t see their CPA as a strategic partner, and furthermore, don’t pay them for that level of effort. They bring them in to kick the tax ball through the IRS uprights in spectacular fashion but leave valuable expertise untapped on the sideline.
The Quarterback = Controller
The controller (or “comptroller” in non-profit or government circles) serves a more senior role, most likely in companies that sit in the $1M-$200M league. They oversee accounting for the entire company and establish processes and best practices for the bookkeeper and other staff. They manage the entire financial process – from budgets and forecasts to interpretation and analysis.
Your quarterback calls the plays and, with a smooth and steady hand, moves the team down the field to score. As your company grows (and prepares for the big game) you may need to invest in this role.
The Coach = CFO
The financial voice of the C-Suite, the Chief Financial Officer (CFO) is the trusted numbers guru in the room when the owner, the CEO, or other senior leadership discuss the company’s economic past, present, and future. A forward-looking visionary, the CFO implements a higher level of strategy, which can include long-term financial modeling, complex analysis of trends, and insight into capital expenditures, debt management, and investments. They ensure your accounting department runs efficiently, with the proper technology and know-how to maximize profit.
With day-to-day operations in the hands of the bookkeeper or controller, the CFO is free to look ahead to new opportunities. They turn insights into action, a band of individual players into a winning team.
At the end of the day, reach for the 30,000-foot view and assess your accounting function objectively. Move at a pace that fits your growth. If your company marches at a more moderate pace, a bookkeeper and CPA team may fit the bill. If the stars are within your grasp, it may be time to invest in a controller or CFO – or a strategic advisor who serves as one.
Related video from the“Profit Points” video series.
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Profit Point Consulting’s mission is to accelerate the growth of small and medium-sized companies through sound, strategic advice, and proactive financial management. If you need a trusted advisor to help develop and execute your vision, call us at (973) 659-1430 or fill out our contact form.