Bookkeeper vs. Controller vs. CFO — SLATE ACCOUNTING + TECHNOLOGY

If you're a business owner who's outgrown trying to DIY your accounting and bookkeeping, you know you need professional help. But what kind of help do you need?

You may hear the terms bookkeeper and accountant used interchangeably, and then there are roles like controller and Chief Financial Officer (CFO).

While all these positions can play a part in the financial management of your business, they aren’t all the same. So let's delve into each role and how to tell which professional services your business needs.

What does a bookkeeper do?

Bookkeeping is often one of the first responsibilities business owners hand off because it's time-consuming. Bookkeepers enter the daily, weekly, and monthly financial transactions into the accounting software and prepare monthly financial reports. They may also handle accounts payable and accounts receivable, which involves paying bills, invoicing customers, and following up on past-due balances.

It's a big job and one of the most important because all business decisions are based on this data.

Bookkeepers generally don't need special certifications, although they might earn a Certified Bookkeeper (CB) designation from the American Institute of Professional Bookkeepers or another credential to demonstrate their skills and experience. All they really need is a thorough understanding of basic financial accounting principles and how to correctly classify different kinds of transactions in the accounting system to create accurate financial statements.

If you have more than a handful of transactions every month, you need someone knowledgeable to enter that financial data and ensure your company's financial records are accurate and up-to-date. Updated data makes it much easier to stay on top of your receivables and file taxes.

What does a controller do?

The controller adds a new layer of financial management to an organization by helping to control expenses and manage cash flow.

A controller's duties might include:

· Supervise the bookkeeper and other members of the accounting department

· Create customized financial reports to meet the specific needs of the business owner

· Choose and maintain financial software and other tools in the accounting technology stack

· Works closely with third parties, such as lenders and tax accountants

· Implement internal controls to prevent fraud and financial misstatements

An experienced controller can be invaluable as your company grows and needs better cash flow management, timely data for making financial decisions, and help ensuring compliance with various financial regulations.

What does a CFO do?

The CFO leads the company's finance function and is a strategic partner to the business owner and other members of the C-suite.

A CFO's duties include:

· Shaping the company's investment strategy

· Making significant investment and financing decisions

· Leading a technologically savvy finance team

· Communicating with investors and the board of directors

· Building credibility for the strategic direction of the company

· Managing risk associated with cash flow, capital, resources, and compliance

· Preparing complex financial projections

Responsibilities that fall under the CFO's umbrella are more focused on strategic management of the company's resources and data-driven decision-making than tracking day-to-day financial transactions.

Bookkeeper vs Controller vs CFO: Which Do You Need?

The decision between hiring a bookkeeper, controller, and CFO involves several factors, including your business size, long-term goals, and budget.

For a small business without complex accounting needs, the first step is often hiring a bookkeeper to handle recording day-to-day transactions. As your business grows, you may need a Controller to handle overall financial management, financial reporting, and compliance.

When you need a long-term strategy and help making data-driven business decisions, a CFO can take your financial operations to the next level.

Keep in mind that if your bookkeeping isn't timely and accurate, your controller and CFO won't have the basic financial statements they need to fulfill their roles.

How to afford the accounting team your business needs

If you're a small to mid-size business, you may wonder how you'll afford any or all of these staff members in your company.

Here are the average annual salaries for each role, according to Salary.com:

· Bookkeeper: $43,857

· Controller: $250,871

· CFO: $436,700

Keep in mind these figures don't include benefits, bonuses, payroll taxes, and other costs of hiring a full-time employee.

Fortunately, outsourcing allows much more flexibility and affordability, helping you get the needed expertise and scale.

When you outsource, you get the right level of expertise when you need it without the high cost. You don’t take on the responsibility of another employee, their benefits, and overhead. Instead, you get the services as you need them, paying only for what you need.

You’ll have access to skilled and experienced professionals helping you make critical business decisions while running your business the way you want.

You don't have to choose between solid accounting and growing your business

Most growing companies need bookkeeping, controller services, and the strategic decision-making support of a CFO at some point. Unless your business is large and well-established, you likely don't need all three full-time and in-house.

That's why outsourced accounting and CFO services are a lifeline for growing businesses. If bookkeeping has you baffled, cash flow is a catastrophe, and strategy is sparse, schedule a call with Slate.

We can provide all the advantages of a bookkeeper, controller and CFO without the full-time salaries and other costs of hiring a full-time, in-house team.

Bookkeeper vs. Controller vs. CFO: Which Do You Need?