It is tempting for a business to look to hire an accounting all-rounder, who can manage an assortment of financial tasks, such as, taxation, compliance, reporting, accounting, and business strategy.
However, finding an Accountant who is happy to work across all areas of the financial mix is unusual and even if they are, there is a strong possibility that they will not have all the necessary skills in every area of accounting.
Finding an Accountant who can deliver in all financial areas is uncommon, not to mention the competition that would exist amongst businesses to recruit and retain such a skilful, all-embracing talent.
Businesses may have great Accountants on the payroll who are able to cover many elements of the financial requirements that the business has, to keep operating and remain compliant, but often businesses wonder what advantages could be gained by having a Chief Financial Officer (CFO) as well.
While a business can continue to operate and remain compliant, adding a CFO Service will be able to add strategic thinking, analysis, and a plan for growth.
So what’s the difference between a CFO and an Accountant?
Accountants and CFOs often share skill sets and can overlap in their responsibilities and workload, but their job roles are fundamentally different.
While an Accountant will be pretty much entirely focused on reporting, compliance, reconciliation, payroll, and activity statement preparation and filing, a CFO will be tasked with business strategy, cashflow management, pipeline forecasting and reporting, budgeting and financial modelling, product mix and commercialisation, reporting to and working with stakeholders and advising the board and executives.
This substantiates the importance of incorporating both an accounting service and a CFO service into your business.
Another key difference between an Accountant and a CFO is that an Accountant is primarily focused on what has happened in the business, so concentrates on the past with their reporting, dealing with creditors and debtors, and ensuring compliance on all levels.
A CFO, on the other hand looks forward, creating strategies, forecasts and plans to hit future targets and goals. A business owner needs to be able to look at the past and the future and so Accountants and a CFO are vitally important to ensure the company operates successfully and can achieve its growth targets and avoid pitfalls along the way. This is an example of how the relationship between the CFO and the Businesses’ Accountants is hugely important to ensure that a business can look both forward and backwards and cover all bases, on its path to success.
Both roles are very important if a business is going to grow and be successful and the CFO and Accountant must complement each other and strive to work as a team, providing their business an expert view of both the past and the future and how they impact each other.
Many businesses already have an Accountant who looks after tax and tax filing, payroll and compliance and debtors and creditors, but are looking to expand or scale up, or to drive more revenue and profit from the business. For these businesses a Chief Financial Officer (CFO) will really help drive the organisation forward. However, it is often very difficult to find a CFO for smaller or medium sized businesses (SMB) and the costs associated with employing a CFO are high.
Outsourced CFO Service
Many businesses look at using an outsourced CFO service, otherwise known as a part time CFO service or a Virtual CFO service , so they can gain all the benefits of the CFO’s skill set without the costs or commitments of recruiting a very senior person into the business.
A part time or outsourced CFO won’t compete with the Businesses’ Accountant, rather an outsourced CFO works alongside a Business’ Accountant in a collaborative manner. An outsourced CFO will usually have significant experience across many business sectors with many business types, so can help support a company’s growth with both their skills and knowledge. Another benefit of an outsourced CFO is that if they are part of an outsourcing company, the skills, experience, and knowledge of other members of their organisation will also be available to a business.
An outsourced CFO will also look at the big picture, rather than being drawn into the detail of the business they are working for. This will allow them to bring an unbiased, external, and detached view to any issues that the business may have standing in its way to achieving the success it is looking for.
Related: In-House CFO vs. Outsourced CFO
Get in Touch
To learn more about how an outsourced CFO can transform your business at an affordable cost, get in touch with our team.
Start your journey with CFO Australia by organising a complimentary call or filling in the form, to see how we can help your business. Our team will be in touch with you within 24 hours to discuss your business needs.