Integrated Business Growth

The Success Labs
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CFO's versus CPA's For Small BusinessThere are many people who do not understand the difference between a Chief Financial Officer (CFO) and a Certified Public Accountant (CPA).

The Difference Between A CPA and CFO

While these positions have different aspects to them, they aren’t mutually exclusive. There is no need for a CFO to be a CPA in order to be good at his job.

What Are The CFO’s Responsibilities?

A CFO is part of a company’s executive team. He or she is responsible for the management of a company’s financial issues. Ideally, a CFO should be knowledgeable in corporate finance and should be able to develop standards for fiscal performance, managing of budgets and assessing of financial risk. A CFO also needs to be able to design and assess financial systems. Developing methods for charting accounts is also a critical responsibility of a CFO. The CFO needs to give advice to the Chief Executive Officer (CEO) of the company, as well as other executives, regarding how to create a financial strategy that will allow the company to meet their financial goals.

What Are A CPA’s Responsibilities?

A CPA’s job is to prepare tax returns. It is important for this person to constantly be in touch with the CFO, offering tax advice that will help the CFO to make educated decisions regarding the future goals of the company. A CPA can offer their insight about taxes, not necessarily any advice regarding the strategic maneuverings of the business as a whole. If the owner of a business needs advice about the value and health of their business, these questions should be directed towards the CFO, not the CPA.

Why Should A Company Outsource CFO Services?

Small businesses will frequently ask their CPA to advise them regarding the finances of the company. This is generally because they do not employ a CFO. A CPA can offer the company their financial opinion based on their particular views on tax law and taxes in general. There are many cases where the most desirable option would be to employ an outsource CFO to help advise a company’s financial strategies instead of going to a CPA for the same advice.

Let’s take a look at some of the most important differences between the positions of CFO and CPA in a corporate environment:

1. The present vs. the future

A CFO will look to the future in an attempt to find the ideal tax strategy for a company. However, a CPA will try to find a tax strategy that can be used immediately. The job of a CPA is to assess all of the numbers after the fact. This is done for the purposes of auditing or tax preparation. A CFO wants to develop an asset and increase the company’s wealth. They will give advice regarding the future. However, their advice is primarily based on previous numbers. Their advice is always related to a specific tax strategy. On the other hand, a CFO is focused on methods to accomplish a company’s strategic goals in the future. These people spend their time planning for acquisitions and company growth. Performance figures are utilized by CFOs to figure out areas where the company should invest.

2. The books vs. company objectives

In terms of the training that CPAs and CFOs receive, both positions are very similar. However, a CFO is mainly focused on the company’s objectives for the future, while a CPA has their focus firmly on the taxes and books of the company. It is important for a CFO to be aware and understand all of the day-to-day operations of a business. This includes finance, manufacturing and marketing. A CPA needs to make sure that a business is able to get the highest returns from the various taxes it has paid.

3. Consulting or part-time

Some companies choose to hire a CFO or a CPA on a consulting or part-time basis. However, it is important that these two positions are never confused because they have extremely different jobs. When a company hires a CFO on an interim or a part-time basis, it can help the business to stay on track in terms of its finances. He or she can also give ideas as to how to make the company grow in the future. It is helpful to have a CPA on call because he or she can help a business to avoid any problems with tax authorities.

If you would be interested in a no obligation discovery meeting, please feel free to contact us today. We would be happy to hear from you.

George Black ~ Author, Strategist, and Outsource CFO ~ works alongside entrepreneurs, business owners and leadership teams to help companies increase profits and break through to their Next Level. CREATOR of The Next Level Navigator, George details this highly effective strategic process in his book: DEAR MR. A ~ letters revealing the secrets of an entrepreneur. Now available on Amazon Kindle.

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