I have an accountant – why do i need a CFO?
The challenge with any industry when you’re looking in from the outside is to understand the different roles that make up a particular profession. And I know I’ve been guilty of that when I’ve looked at other professions.
Often when businesses say they have an accountant they mean a tax accountant. A tax accountant structures your business effectively for tax, and deals with your year-end tax return filings and sometimes other compliance filings.
Businesses also often refer to their bookkeeper, insourced or outsourced, as their accountant.
A bookkeeper will generally cover the following tasks
- Codes the transactions to your general ledger (eg. Xero)
- Accounts receivable – issues and chases payment of invoices
- Accounts payable – logs and pays supplier invoices
- Compliance filings (eg. BAS and payroll-related filings)
Broadly a bookkeeper is responsible for day-to-day transactions and ensuring that the financial data is correctly reflected in the business. The focus is on what has happened rather than what will happen.
The forward-looking lens is where your CFO steps in.
A CFO provides commercial and strategic finance leadership to support your business growth. They will be responsible for
- The “so what” of your numbers. What are your financials telling you about the health and direction of your business? What story are they telling you?
- Projecting your financial performance based on historical information and planned investment
- Running scenarios that show “what if” the business makes certain choices or is impacted by certain variables (eg. loss of a key customer or slowing sales)
- Managing risk, particularly financial risk, within the business
- Developing or evolving processes to support business growth and allow it to operate effectively
- Managing relationships with key financial partners; tax advisors, ATO, banks, lenders, and investors.
What financial support does your business have today and what does it need for tomorrow?