There are so many misconceptions about what CFOs do, what accountants do, and what controllers do. In this blog post, we will clear up some of the confusion and help you decide whether your business needs one (or more) of these roles. Keep in mind that not every small business or firm needs all three of these positions - it depends on the size, scope, and complexity of your company. Let's start by discussing what each role entails.
First and foremost, virtually every business needs an accountant! An accountant is responsible for maintaining financial records, preparing tax returns, and ensuring that the company is compliant with all financial regulations. In addition, accountants can provide valuable insights into the financial health of a company and offer advice on how to improve profitability.
A CFO (Chief Financial Officer) is responsible for all aspects of a firm's finances, from developing a financial strategy to overseeing investments and managing risk. A CFO also works closely with the CEO to ensure the company's financial goals align with its overall business strategy.
A controller is responsible for supervising the accounting department and ensuring that financial reporting is accurate and timely. They also develop and oversee internal controls, which are procedures designed to prevent fraud and protect the company's assets.
Now that you know a little bit more about what each of these roles entails, let's talk about when your business might need one (or more) of them. Typically, businesses only need a CFO or controller if they are publicly traded, have complex financial structures, or are undergoing rapid growth. However, smaller businesses may also benefit from having a CFO or controller on staff if they want someone to take on a strategic role in financial planning and decision-making.
(Here are some signs you need to hire a bookkeeper)
As for accountants, most businesses will need the help of one accountant or bookkeeper (depending on the size of the company). Larger businesses may need a team of accountants to handle all of the financial responsibilities. Many businesses do not need a full-time bookkeeper or accountant on staff, however. Outsourcing bookkeeping is an excellent alternative to a full-time hire, and it can save your business a lot of money.
(Bookkeepers and accountants can perform different duties. Learn more about the difference between accountants versus bookkeepers here)
There are a number of other benefits to outsourcing bookkeeping for your company, including:
You can focus on your core competencies: When you outsource bookkeeping, you can focus on running and growing your business rather than getting weighed down in the details of financial record-keeping.
You'll save money: Outsourcing is often more cost-effective than hiring a full-time staff member.
You'll get expert help: When you work with a professional bookkeeping firm, you can be sure your books are being handled by pros who stay up-to-date on the latest changes in tax law and accounting standards.
Whether or not your firm needs an accountant, CFO, or controller depends on many factors. In this blog post, we have only scratched the surface of what these roles entail. Still unsure whether your company needs one (or more) of these positions? Then we would love to speak more to answer your questions.
In addition to our bookkeeping services, Two Roads also offers CFO advisory and other services that can drive your small business to the next level of success.
Did you learn a lot from this post? Here are three more bookkeeping and accounting posts to visit next: