In the early stages, new businesses have a lot of moving parts. Proper handling of the financials is crucial for every type of business; for some, keeping up with the day-to-day of bookkeeping, bill pay, payroll, and cash flow can be overwhelming, especially when business is expanding. But how do you know who to hire? A bookkeeper can handle the daily tasks and pull financial reports from your cloud-based accounting software. A Certified Professional Accountant (CPA) can do all of the above, and also offer additional expertise in tax law, reporting, and financial advice. A CFO or outsourced CFO is your financial guru and can provide all that a CPA can, and offer more in-depth guidance and business advice. Choosing which role to work within your company is a matter of understanding the differences and identifying the best fit for your needs and budget.
For some businesses, a bookkeeper will be all that you need to get the business started and handle the day-to-day financial operations. There is no one-size-fits-all approach because it really depends on the complexity of the business, and if you’re just starting out, your needs are likely to change over time. In smaller companies, it’s common to have an individual with another full-time role (e.g. office manager) take on bookkeeping responsibilities. Sometimes the owner will try to keep up with the books, particularly in the beginning.
A bookkeeper can be hired on as a full-time employee or a remote contract worker. Another option is to outsource your bookkeeping to a firm (such as ours) that specializes in accounting services. Remote bookkeepers offer many advantages, like the ability to work with an industry expert (regardless of geographical location), expertise in cloud-based accounting software, and time savings via automated processes and virtual collaboration. Being set up for virtual work enabled many companies to continue conducting business and collaboration during the pandemic shutdowns.
A bookkeeper will likely be able to meet your financial needs if you:
- Can’t keep up with volume of bookkeeping work yourself
- Need a second set of eyes on your books
- Are getting outside of your comfort zone with the complexity of your accounting tasks
A financial controller can cover many roles, including accounting, finance strategy, regulatory compliance, and leadership. In many cases, they are the company’s lead accountant or lead of the finance department and fill many financial roles depending on the needs of the company. In smaller companies that need more than a bookkeeper or accountant, a financial controller on staff can ensure tax compliance in consultation with an external CPA for tax or audit preparation. The financial controller can also assist with budgeting, cash flow management, payroll, accounts payable and receivable, and other financial tasks.
Your business could benefit from a financial controller if:
- It’s a small-to-medium sized company with multiple departments that have varying financial management needs
- You have multiple investors who require regular investor reports
- Your company is using accrual-based accounting instead of cash-based
Certified Public Accountant (CPA)
Many people think of a CPA as someone who prepares your tax return and deals with the IRS, but there are many other ways the right CPA can guide a business. CPAs are accountants that have passed rigorous certification exams and have extensive knowledge in tax and business finances. They can be beneficial to startups, but they can also help a business at any point to reduce unnecessary tax burdens with proper tax planning and projections. CPAs can prepare detailed financial reports that will help you to better understand your business’s financial position. By looking deep into company finances, a CPA will be able to help you make well-informed business decisions. It is important to choose a CPA who is well-versed in your industry, as well as the variations in tax laws across any state in which your business operates.
You probably use a CPA to prepare your business tax returns, but you may be unaware of the additional services you could be using throughout the year. Your business may benefit from a stronger relationship with a CPA if you:
- Are applying for loans or pitching investors, or have other circumstances that require financial statements
- Seek to benefit from tax planning and strategy
- Would like to learn more about how you may be able to maximize tax deductions between your personal and business taxes
Chief Financial Officer
For some businesses, a Chief Financial Officer and all of the experience that comes along with a CFO status is necessary, especially when business is growing substantially. CFOs are responsible for managing all financial actions of the company, tracking cash flow, financial planning, and evaluating current and past financial positions to make future decisions. The CFO role oversees your bookkeeper, controller, and any other finance roles in the company. A CFO can elevate your company to the next level. However, hiring a full-time CFO can be out of reach for young companies with limited operating capital. An Outsourced CFO can help growing businesses by providing everything that a CPA can, while also setting up accounting processes, assisting in acquiring loans or investors, forecasting, and in-depth business advisory.
Your business may be ready to bring on a CFO if it is:
- In need of financial oversight for all aspects of the business
- Looking for strategic growth insights with a balanced risk assessment
- Struggling to stay in compliance with industry-specific regulations
Our firm also provides outsourced CFO services for companies of all sizes. We offer packages that include long-term, part-time, and interim CFO guidance. Services can include startup guidance, financial projections, budgeting and planning, documentation prep for mergers and acquisitions, interim guidance for those facing a financial challenge, and much more.
Bookkeepers, CPAs, and outsourced CFOs can alleviate the stress of business financial recording, preparation, and planning. Choosing the right one for your business truly depends on the business goals, position, budget, and needs. Contact us if you need help deciding which is right for you.