There are several reasons your company may be seeking professional financial consulting or expertise. Your company may be preparing for a transaction or raising funds, may be experiencing growing pains, or may be in a state of transition. It may also be undergoing challenges such as negative cash flow, small profit margins, or outgrowing your existing systems.
Which financial expert can give you the proper guidance without undershooting or overshooting expertise?
The most common professional financial experts and consultants are bookkeepers, CPAs, controllers, and CFOs. While there are some skills and duties that overlap, each of these financial professionals offers different professional expertise to companies. In general, bookkeepers oversee the books, accountants oversee basic financial reporting, controllers oversee cash flow, CPAs are tax experts, and CFOs are financial strategy and systems experts.
Below are some of the most common financial needs and challenges a business may face and the financial expert or consultant that can best fill each role.
Financial Expert Roles & Responsibilities Breakdown
|Basic Accounting Functions|
|Record & Classify Transactions||X|
|Interpret Financial Data||X||X|
|Board Meeting Presentations||X|
|Tax Strategy or Advice||X|
|Minimize Tax Liability||X|
|Navigating Tax Regulations||X|
|Challenges or Opportunities|
|Clean up Books||X||X|
|Books Consistently Close Late||X|
|High Accounts Receivable||X||X|
|Lost or Misplaced Cash||X||X|
|Cash Flow Issues||X||X|
|Preparing for Transaction||X|
|Implement Sales Incentives||X|
|Too Much/Too Little Inventory||X|
|Systems Don’t Work Together||X|
|Merger or Acquisition||X|
What are a Bookkeeper’s Roles & Responsibilities?
A bookkeeper is in charge of recording financial transactions — or “keeping the books” up-to-date, as the title suggests. Bookkeepers are generally in charge of payroll, processing financial transactions, reconciling accounts, managing accounts receivable and accounts payable, and preparing initial financial statements. Bookkeepers typically have at least an associate’s or bachelor’s degree in accounting.
What are an Accountant’s Roles & Responsibilities?
While an accountant is qualified to perform bookkeeping tasks, they’re generally more experienced in report preparation and interpretation than bookkeepers. Accountants typically have a bachelor’s degree in accounting. They’re typically experienced in bookkeeping, maintaining business accounts, and helping prepare simple tax returns.
What are a CPA’s Roles & Responsibilities?
While all CPAs are accountants, not all accountants are CPAs. CPAs have met specific state and education licensing requirements and passed the CPA exam. CPAs are considered fiduciaries to their clients, meaning they have a legal duty and power to act on behalf of and in the best interest of their clients. They’re also more experienced in tax code and strategy. In addition, only a CPA can prepare an audited or reviewed financial statement.
What are a Financial Controller’s Roles & Responsibilities?
A financial controller oversees accounting allocations, reporting, and cash management. It’s wise to have a separation of duties between accountants and controllers so there is a checks and balances system. A controller is also in charge of the internal controls over accounting and financial systems. The controller will also likely oversee negotiating lines of credit and vendor agreements, as well as reviewing financial contracts. Lastly, the controller oversees the preparation of financial statements, as well as budgeting, budget-to-actuals, and basic financial projections.
What are a CFO’s Roles & Responsibilities?
A CFO is an experienced, high-level financial strategist. This senior executive oversees all financial actions and strategy within a company. While other financial roles are typically concerned with historical and present-day finances, a CFO is interested in the future. A CFO will analyze a company’s financial strengths and weaknesses, and will plan and execute strategies to maximize opportunities and positive outcomes. CFOs are also in charge of forecasting, systems (including financial systems as well as operational systems including costs and making sure every branch of the company is integrated into tracking and financial systems), troubleshooting challenges, or opportunities such as raising funds or M&As.
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