When running a successful business, one of the most important aspects is financial management. However, it can be hard to know who should handle your business's money. Do you need a bookkeeper, accountant, CPA, comptroller, or CFO on your team? All? None? Here's a closer look at the differences between these roles so you can make an informed decision about who should manage your finances.
A bookkeeper is responsible for maintaining accurate financial records of all business transactions, including recording income and expenses in journals or software programs. The bookkeeper also processes payroll and prepares financial statements for internal use or external auditing purposes.
An accountant's responsibilities often overlap with those of a bookkeeper. However, they go beyond data entry and record-keeping. For example, an accountant will analyze the data they have collected from their bookkeeping activities and advise on how to best use that information to ensure the financial health of a business. They may also prepare tax returns or assist in preparing documents required by regulatory bodies such as the IRS.
CPAs, or certified public accountants, have completed additional training in taxation laws and regulations related to businesses. CPAs typically earn a bachelor's degree in accounting or finance and have to pass a national exam. CPAs are typically involved in more complex tax filing processes than accountants or bookkeepers because of their advanced knowledge base. As a result, many small businesses benefit from working with an experienced certified public accountant.
A comptroller is essentially an accountant at a higher level with greater responsibility over the finances of an organization or company. In addition to overseeing accounting operations such as budgeting, forecasting, cost analysis, and management reporting, they may also be responsible for investments and acquisitions as well as regulatory compliance issues such as audits or taxes.
A CFO, or Chief Financial Officer, oversees all financial functions within an organization, including:
- Cash flow management
- Risk assessment
- Compliance oversight
- Strategy development and implementation
- Supervise all other people in the accounting department
They work closely with the CEO and other C-suite executives on major organizational decisions regarding finances.
If you are small and just starting out, you probably only need a bookkeeper for data entry and proper record-keeping. Most small businesses, however, benefit from working with a CPA. The education and training of a CPA are invaluable to everyone, from growing businesses to large corporations.