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 
• Payroll
• 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?