CFO and CPA – Complementary, Not Competing

I speak to a lot of small business owners, and there seems to be a great deal of confusion about the differences between a Chief Financial Officer’s (CFO’s) job functions compared to those of a Certified Public Accountant (CPA).  Companies hire CPAs for bookkeeping activities and the preparation of business tax returns. While it might sound logical that a CPA could offer larger-scale, strategic financial advice, there is a misconception about the depth and breadth a CPA can provide.  A CPA’s education and experience is geared toward providing tax advice, looking at historical data and using that data to compile a multitude of financial statements.  A CFO’s primary function is the exact opposite. They are invested in looking forward, primarily from a strategic point of view, planning, forecasting, and budgeting based on the financial statements that a CPA has put together.

Companies that utilize a CPA and a CFO have both ends of the spectrum covered. While a CPA’s responsibilities revolve around compiling past data, a CFO has overall responsibility for the financial well-being of the future of the business.  A CFO typically is part of the executive team and focuses on the future strategies needed to achieve the business plan.  They understand how to assess financial risk, manage budgets, and develop standards for fiscal performance for the company.  They are focused on all operations and advise the CEO/Owner and other executives how to align their financial strategy to meet business goals.  CFOs implement systems and processes, develop key performance indicators both operationally and financially, develop and implement financial planning, and manage cash to ensure smooth operations and business growth.

Growing a small business requires both of these roles to facilitate collaboration and establish a connection between past activities and future strategy. Below is a comparison chart of their different roles.

CFO and CPA

As you look at your own company, ask yourself if you have both of these roles adequately covered. If you thought that the strategic portion of your business should rest on your CPA’s shoulders, perhaps it’s time to think again.

 

 

Rick Arthur

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Rick Arthur is a CFO whose expertise is built on Financial Intelligence and 35 years in senior financial roles. Coupled with a CEO’s perspective and the experience of building his own $20 million company, he brings a unique depth of insight into business from the top down. Wired to get to know people, Rick works hand-in-hand with business owners of intentional, growth-oriented companies, solidifying relationships as a trusted advisor and confidant to his clients. He leverages his experience to help business owners gain traction and stay laser-focused on the company’s vision, cash flow, and profitability – all while creating big picture solutions for strategic planning, growth and sustainable success.