What Are the Differences Between a CPA, a Controller and a CFO?

Successful business strategy requires judgment supported by solid financial data. While in their startup phases, many entrepreneurs handle their own bookkeeping and financial planning. However, a growing business soon needs support from accounting professionals, first from an independent CPA and then by adding a Controller to the company’s management team.

As continued growth brings new challenges and opportunities, some decisions will then require the expertise and perspective of a seasoned financial counselor, whether a corporate CFO or a part-time CFO consultant. This article will discuss the differences between each of these professionals and when you can add the most value by accessing their decision support. 

What is a CPA?

A CPA (Certified Public Accountant) is a financial advisor who has a formal education in accounting, has experience working for a licensed CPA, and has passed a state certification exam. The CPA can then be licensed by that particular state to practice accountancy and to provide financial services to the public. CPAs are also required to meet annual continuing education minimums to keep their knowledge current.

A CPA Adds Value By: 

·        Taking over bookkeeping to let you focus on your business

·        Explaining new tax laws, preparing returns and resolving tax issues

·        Consolidating your reporting from multiple businesses

·        Responding to a tax audit, a cash crunch or a business crisis

What is a Controller?

A Controller is an executive who manages a company’s accounting activities, prepares budgets and financial statements, handles payroll and supervises bookkeeping staff. A primary duty of the Controller is to see that records are prepared on time and accurately reflect the company’s financial condition. In a smaller company, the Controller may also be the CFO, working with the CEO on business planning.

 A Controller Adds Value By:

·        Consolidating accounting processes under one team leader

·        Upgrading recruitment and supervision of your accounting staff

·        Refining bookkeeping processes to be more secure and accurate

·        Aligning monthly and quarterly closings with financial reporting

·        Balancing sales forecasts with budgets and planned investments

·        Upgrading your software for accounting and resource planning

What is a CFO?

A CFO or Chief Financial Officer is a senior executive, typically in a large company, with overall responsibility for financial planning and strategy. Unlike a Controller, who is focused on current requirements in accounting, the job of the CFO is to optimize the company’s financial performance, including its liquidity, return on investment, taxation, financial reporting and strategic objectives.

What is a CFO Consultant?

A CFO Consultant, also known as a fractional or outsourced CFO, is retained on a part-time basis to advise a client company as needed. A CFO consultant brings experience with many different companies and industries, and they may have a network of lenders, investors and other resources to help the client company raise money, navigate a crisis or sharpen its strategic planning.

A CFO (or CFO Consultant) Adds Value By:

·        Reviewing your business strategy from a seasoned perspective

·        Building relationships with a wide circle of lenders and investors

·        Managing a crisis such as litigation or government action

·        Designing dashboards to track indicators and inform decisions

·        Preparing for growth by acquisition or public offering

·        Exploring options, educating the team and empowering solutions

·        Planning the timing and investment to launch a new business

·        Analyzing your credit, addressing debts or seeking new financing

If your Chicago area business is not quite ready for a full-time CFO, but would benefit from the experienced perspective of CFO consultant, talk with Coveted Financial Services.