Bookkeeper, CPA, or CFO, Which is right for you?
Depending on the size and complexity of your business, you may have several people involved in your company’s finances. I’ve seen many small business owners hire a bookkeeper or accountant expecting to receive everything from bookkeeping to tax preparation and strategic financial advice. While some professionals do provide a variety of services, these roles are not the same.
Here, we explain the differences between bookkeepers, Certified Public Accountants (CPAs), and Chief Financial Officers (CFOs) and when it may be time to hire each.
Bookkeeper vs. CPA vs. CFO: Responsibilities
Bookkeepers, CPAs, and CFOs can all play an important role in your business, but the actual responsibilities of each role vary quite a bit.
The role of a bookkeeper
A bookkeeper’s main responsibility is to keep the company’s financial data up-to-date and accurate. They enter financial transactions into the right accounts in the company’s accounting software, pay bills, send invoices, track inventory, reconcile bank and credit card accounts, process payroll, and maintain receipts and other documents.
A bookkeeper’s duties can vary depending on their experience level, but any bookkeeper you hire — either internally or on an outsourced basis — should be familiar with your accounting software. They may also be able to help you streamline your financial process by connecting bank accounts and putting other automations in place.
Bookkeeping services usually average anywhere from $40 to $100 per hour, or $250 to $300 per month. Hiring a bookkeeper is a great first step for many small business owners, as outsourcing your bookkeeping can save time. Plus, outsourcing bookkeeping is scalable — as you grow, you can easily ramp up your bookkeeper’s hours to meet your needs.
The role of a CPA
CPAs can take on many roles — they’re not limited to one industry or even one job function, although many CPAs focus their expertise on a particular area. For example, some perform financial statement audits, some provide tax preparation and planning services, and some work for businesses, government agencies, and non-profit organizations.
If you’re interested in working with a CPA for your small business, you likely want someone to provide tax planning and preparation services and help you find meaning in your numbers.
Some CPAs perform bookkeeping services or have an in-house bookkeeper to handle this work for their clients. This ensures the CPA has up-to-date and accurate financial data to help you identify strategies to minimize taxes, improve cash flow, plan for the future, and more.
Depending on the CPA’s services and experience, their rates may average anywhere from $80 to $300 per hour.
The role of a CFO
The CFO of an organization is typically more focused on long-term financial strategy, including forecasting, optimizing systems, raising capital, and more.
While a CPA may offer some business advisory services, CFOs usually have more hands-on experience working in particular industries, overseeing business operations, and managing corporate finances.
Outsourced CFO services cost, on average, $3,000 to $10,000 per month. Clearly, hiring a CFO is a significant investment, so businesses usually hire a full-time or outsourced CFO when they need help with:
- Financial strategy and growth
- Measuring and improving profitability
- Establishing financial systems, policies, and procedures
- Managing relationships with shareholders, investors, and lenders
- Assessing and minimizing financial risks
- Raising capital
- Handling mergers and acquisitions
Where to start building your accounting and finance team
Expanding your team to include a bookkeeper, CPA, or CFO is an investment but avoid the temptation to base this decision on cost alone. As you grow, it’s important to invest in professionals who can free up your time, keep your business on track, and help you make better decisions for your business. Many talented professionals price their services fairly, so optimize for quality rather than price, and you will save money in the long run.
If you’re not sure what level of service you need to help your business grow, schedule a call with me! I can help you review your current situation and goals and weigh the pros and cons of each.
