Does a Small Business Need a Bookkeeper, a CFO, or a Controller?

When starting a small business, it may be tempting to stay in control of your finances and do all of the bookkeeping and accounting yourself. Some entrepreneurs choose a trusted family member to help with small business accounting. When a small business owner begins their business venture, their passion doesn’t always lie in accounting. Understandably, accounting services get put on the back burner, and business owners make do with the limited knowledge they have.

A lot of businesses start out with the DIY approach to accounting. While this may make sense at the beginning of a startup, you will soon find that professional accounting services can offer real value and financial return to your small business.

What Are the Benefits of Hiring a Professional for Small Business Accounting?

Running your accounting system by yourself or asking a friend for help will not result in the savings that professionals in the industry will implement for you in your small business. Accountants are in charge of your money and have a responsibility to know how to save the most money and run the business seamlessly. Take a look at the potential savings:

  • Tax savings
  • Vendors and manufacturing savings
  • Payroll services
  • Reports and big picture snapshots of the financials
  • Risk mitigation with insurance and checks and balances to prevent fraud
  • Simplifying operations and processes to save money
  • Avoidance of fines, late payment fees, high-interest penalties from missed payments, and dings to your credit score

It may be an initial investment to hire a small business accountant. But when you look at all of the savings that result from having a professional behind your accounting system, you will quickly recognize the return on investment. While you can put your passion into building your business, a small business accountant can use their expertise to save you money every step of the way.

Does a Small Business Need a Bookkeeper, a CFO, or a Controller?

Once you decide that you need to hire out for small business accounting services, what service is required for your specific company? What are the differences between a CFO, Controller, and Bookkeeper?

Services Offered by a Bookkeeper

A bookkeeper keeps track of all transactions regarding money going out and money coming in. They do not offer expertise when it comes to business strategy or expanding your business. Some bookkeeping tasks include:

  • Accounts receivable and accounts payable
  • Keeping a list of all small business costs
  • Managing payroll, including tax and federal withholdings and insurance deductions
  • Preparing reports
  • Paying the bills on time
  • Tracking inventory
  • Preparing taxes

A bookkeeper is responsible for the necessary accounting transactions and helps you keep your small business finances organized with all records up to date. A detail-oriented bookkeeper may be all you need when your business is small. If you’re not looking to be advised on your business’s growth and the right financial path for growth, then use a bookkeeper.

When A Small Business Needs a Bookkeeper

If you find yourself putting more time and energy into keeping up with your books, then it may be time to hire a bookkeeper. You can outsource bookkeeping services instead of hiring an in-house employee. It is an excellent time to hire a bookkeeper if you don’t fully understand the accounting.

If you are unfamiliar with tax code and how to save the most money in taxes for your business, a bookkeeper can help. If your business experiences rapid growth and keeping the books becomes overwhelming, then you can hire out.

When seeking investors or presenting to shareholders, professional reports may be preferred and can be drawn up by a bookkeeper. The level of professionalism in which you present your company can rely on whether you have a professional handle your bookkeeping or not.

The Role of a Controller

Another role for small business accounting is a controller. When your company becomes large enough to have one or more financial employees or an accounting team, a controller oversees that team. They are usually mid-level accounting staff, reporting to the CFO or CEO of the small business. The responsibilities of a controller include:

  • Managing the accounting team
  • Running reports for in-house review
  • Financial risk management
  • Budget decisions
  • Final sign-off on accounting services
  • Implementing tax strategies
  • Consulting in regards to investments or business strategy

A controller has a full view of the company’s accounting practices, implementing the most streamlined processes along the way. When leading the accounting team, the controller is the trusted leader who gives the final sign-off on critical financial operations, including taxes and reports for the board of directors.

When a Small Business Is Ready for a Controller

As the business grows to require more than a one-person accounting team, a controller may be needed. Suppose your small business has a board of directors. In that case, it is common practice to have a controller in charge to present finances and take on protecting the company’s assets. A controller typically focuses on accounting services while a CFO concentrates on strategy.

An alternative to hiring an in-house controller is outsourcing your accounting to a firm specializing in small business accounting. The professional accounting team will serve the same purposes as a controller and always have your business’s best interest in mind.

What Are the Responsibilities of a CFO?

CFO’s are involved in all business decisions and work closely with the CEO. As your business grows and turns high profits, a CFO has the responsibility to foresee risks to the company and protect against them. Some CFO duties include:

  • Steering the company through mergers and acquisitions
  • Changing the business structure
  • Implementing expansions
  • Managing stakeholder relationships
  • Setting financial goals
  • Understanding the market and capitalizing on it
  • Making investment decisions

A CFO is vital for a business that is growing rapidly. With a financial expert at the helm of a growing company, the accounting practices will never be neglected. A business cannot succeed without a team that is proactively protecting the assets and implementing business strategy.

When a Small Business Would Benefit from a CFO

For an executive-level financial officer who works hand-in-hand with the CEO and oversees the whole company’s financial operations, you will need a CFO. If your company has grown to the capacity of needing a financial strategist involved in every business decision, it is time to hire a CFO.

The financial aspect of the company is just as important as the creative process of running a business. And every creative and logistical decision has a financial component to it. That is why the role of a CFO is so vital for a growing business.

A CFO should have expertise in small business operations as well as the financial systems of a company. Hiring out a small business accounting service can benefit your company, and the CFO can keep in close contact with that team to help implement business strategy along the way. The CFO will also present the financials to the board of directors and be your small business financial expert.

In Summary

While you can get away with hiring a bookkeeper while your company is small, it is vital to invest more money into your accounting services as the business grows. A bookkeeper will keep you organized and provide you with a detailed view of your financials each month, making sure payments and payroll are processed on time.

By the time your business has grown to have more than one accountant, then a controller would be the person in charge of overseeing the accounting team. You can always hire an accounting team that specializes in small business to take care of your accounting needs as your business grows.

A CFO would be needed to represent the business’s financial side for a small business experiencing rapid growth and coming up on huge expansion decisions. With a CFO on the executive team, the CEO can focus on growing the business, always receiving input about whether ideas are financially feasible. A business owner relies on the information from the CFO.

Make the decision on what kind of accounting team is right for your small business. Taking shortcuts with accounting can lead your business to miss out and huge savings and ultimately lead to the business’s demise. Arm your team with accounting professionals, and be ready to change the team as your small business grows.

Hiring Small Business Accountants

The benefits of hiring out your accounting services are innumerable. The huge savings you will receive will cover the costs of accounting fees and more. Find an accounting service that has a good reputation in the small business industry. An accounting firm with niched experience will only instill more trust and start your relationship off to a good start.

If you are looking for an accountant specializing in small business services, then Easier Accounting is here to help! Getting control of your bookkeeping and accounting for your small business should be a priority. Instead of doing it all yourself, seek help from a knowledgeable accountant. Call us at (888) 620-0770.

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