Understanding the Role of a Bookkeeper, Accountant, Controller, and CFO for Your Growing Business

Published by Matt Brady | January 11, 2021

Early on in your business, the most you probably needed to manage your daily company finances was a bookkeeper. In the startup phase, you may even have done your own bookkeeping. But in every organization’s path to success, there comes a point when you must take the plunge and begin delegating.

As your company expands to include more employees, customers, and products, you will benefit from a team of financial experts. You may need several bookkeepers, an accountant, a controller, and a CFO. Each of these experts has a specific role and area of specialization. How do you know which positions are critical to your business operations and when to fill them? In this article, we’ll provide key insights into when and to whom you should delegate financial tasks by exploring the role of each member of a financial team.

 

What Does a Bookkeeper Do?

A bookkeeper handles the basics of your business operations. Their function is to manage daily financial tasks, enter the data, and provide an accurate accounting of your business activities. They ensure the accuracy of the data entered in spreadsheets and databases so that reports can be pulled. Bookkeepers must know how to code or assign each transaction so it shows up in the correct account. Primarily, this is a data entry position managing:

  • Accounts payable entries.
  • Accounts receivable entries.
  • Inventory accounts entries.
  • Payroll entries.

 

What Does an Accountant Do?

An accountant has similar responsibilities to a bookkeeper, but they are more specialized. Accountants are required to have a four-year college degree, giving them a higher level of expertise. They oversee the bookkeeper’s work, manage the company accounts on an advanced level, and ensure correct reconciliation. Accountants have the knowledge to advise you on running your finances more efficiently. They are responsible for:

  • Ensuring accuracy of financial documents.
  • Validating compliance with pertinent laws and regulations.
  • Potential assistance with tax preparation.
  • Evaluation of financial operations, identifying issues, and providing solutions.
  • Offering guidance on increasing profit margin.
  • Forecasting and risk analysis assessment.

 

What Does a Controller Do?

A controller can perform the same duties as an accountant, but with a wider scope. They are responsible for running the entire accounting department and its staff. Everyone in the department answers to the controller. The controller answers directly to the CFO. Controllers ensure the implementation of the CFO’s directives within the department. They bear the final responsibility for the accuracy and compliance of the department’s activities, including:

  • Controlling the company’s cash flow.
  • Reducing risk and managing cash.
  • Assigning and communicating responsibilities to accounting staff.
  • Ensuring the accuracy and viability of financial statements.
  • Creating budgets.
  • Coordinating with management in other departments.

 

What Does a CFO Do?

The CFO (Chief Financial Officer) is the principal financial officer and the public face of the company when it comes to all things financial. The CFO oversees the controller and takes responsibility for the company’s current state of financial affairs. CFOs are instrumental in determining the company’s financial direction and overall strategy for future growth, and they report to the company stakeholders. Ultimately, they optimize the company’s financial performance in the areas of reporting, liquidity, and return on investment. A CFO’s duties include:

  • Financial reporting to shareholders, lenders, employees, research analysts, and regulatory bodies.
  • Ensuring the company’s ability to meet its financial obligations.
  • Managing debt and investments.
  • Financial planning and analysis.
  • Strategizing to support the company mission, vision, and values.
  • When to Hire for Specific Financial Positions

 

The key items needed to maintain healthy finances for your company include accurate data entry, producing timely reports and statements, budgeting and projections, and strategic planning. As a startup business owner, you most likely fulfilled all financial positions yourself. But unless you intend to act as a sole proprietor indefinitely, negotiating the steps to becoming a scalable business involves replacing yourself with qualified personnel. Bear in mind that you can outsource to qualified companies that specialize in managing business finances in lieu of hiring full-time employees.

Here are a few tips about when to bring on specific members of your growing financial team:

  1. Hire a bookkeeper when you can no longer keep up with entering your financial data in your bookkeeping program.
  2. Bring an accountant on board when you need someone to keep your company legally compliant, up to date with tax laws, and prepare annual reports.
  3. Enlist the services of a controller when your company increases in complexity and you need someone to interpret your financial data and make recommendations to save money and maximize capital.
  4. Recruit a CFO when you need someone with financial acumen to assist you with business decisions that drive revenue and increase profitability.

 

Scale Your Business With a Financial Team

Very few companies start out with a complete financial team in place, yet all the finance and accounting tasks must be accomplished. Taking your business to its full potential means that you cannot be the one individual in the company fulfilling every role. With the right employees on board, you can step back from every aspect of daily operations to focus on the big picture strategy for growing your business. When all is said and done, you can devote more of your time to leadership when you have top-notch bookkeepers, accountants, a controller, and a CFO to oversee financial operations.

Engaging or outsourcing for your finance team can feel overwhelming, but we can help. To learn more about how these essential finance roles can benefit your business, consult with your BradyRenner CPA today.

 

Image Credit: Unsplash @Creative Commons