CPA vs CFO vs Bookkeeper: What's the Difference?
What is the difference between a CPA, CFO and bookkeeper? These terms get tossed around and you have no idea if you need one or the other or all!
Well I’m here to break it down:
CPA - Certified Public Accountant
Professionals who have a deep understanding of tax law and strategy to assist businesses with accurate and most favorable tax liabilities. They understand accounting systems and financials for businesses to stay in compliance and watch for tax implications.
Focuses on tax related issues with the client
Tax planning for future plans
Prepares taxes and understands the law
Verifies that the financials are clean and accurate
They may ask:
Can I assist in what structure is best for your business?
Have you considered __________ as a deduction?
Can we meet at year end to strategize tax planning?
CFO - Chief Financial Officer
Are appointed to look forward in your business to drive growth. They help make financial decisions, funding, shape and implement financial strategy.
Focuses on future cash flow
Long-range operational planning
Financial project management
Financial risk assessment
Measuring and improving profitability
They may ask:
What level of risk are you willing to take to accomplish your goals?
What timeline are you hoping for?
What rate of return are you aiming towards?
Bookkeeper
Someone who works for the company to keep the financial books either as an employee or subcontractor.
Responsible for accurately recording transactions
Tracking accounts receivable and accounts payable
Reconciling and adjusting inventory
Reporting payroll (sometimes)
They may ask:
What is the nature of this expense?
Are you correctly recording sales tax?
Do you do inventory counts?
How do I know when/if I need them?
CPA - Certified Public Accountant
There are many instances where a CPA would be appropriate to utilize such as owning a business, owning a rental property, or complex investments.
When running a business, a CPA is vital to have on your team when it comes to filing your taxes accurately and performing tax planning. A good CPA will pay for themselves multiple times over in the money they save you.
CFO
You’ll usually need a CFO when you are needing help with long term strategic planning, forecasting, expense control/cashflow management, and overall decisions.
This role is what can interpret all those big goals you have into numbers - there is a calculation for every dream you have. A CFO can help guide you in all the financial steps to get there.
Bookkeeper
When running a business and you either hate managing the books or spend too much time doing it. This piece is the most time consuming and least complicated portion of the puzzle.
I don’t mean to imply that bookkeeping is easy, because that’s not always the case. However, by doing it yourself you aren’t gaining much and you are using your most valuable asset: time. This is one of the most common things I suggest people to outsource.
What services I provide:
I provide CPA services and CFO services for my clients. I am able to review the bookkeepers work, prepare the tax returns, tax planning and assist in large financial decisions with numbers.
There is a financial formula for all the goals in your head. I can help make them a reality.
Are you wanting a CPA, CFO or bookkeeper in your business? Share which one and why below!
