Does my business need a CFO, an Accountant, a Bookkeeper or all three?

The great resignation that some say is facing our workforce in 2021/22 may not all be bad news. It may, in-fact, give many businesses a chance to change, adapt, re-look at existing structures within the organisation and adopt some new hiring practices.

Good businesses recognise the need to surround themselves with the right people at the right time along their journey. Great businesses know that cornerstone roles in areas such as Finance, IT and Sales are critical in securing coveted business success, but what if a role could be covered by one or indeed many different job titles.

Let’s take the finance and accounting function. An important area of the business ensuring day-to-day cash flow is properly managed, that they are fully compliant, receiving timely information from which to make well informed decisions.  A strategic partner or sounding board for strategy, risk or sometimes even legal requirements that businesses face everyday.

Whilst a unicorn of a person may be able to provide all of these requirements, that age old adage of  “a jack of all trades and a master of none” certainly could apply. There needs to be that magic mix of skills & experience, business nouce and in these covid time flexibility and nimbleness to adopt and adapt. 

Best in class structures that support an organisation now and in the future are ever changing. Making the decision to hire one or many of these roles will depend on many things.  So what are the differences between CFOs, accountants and bookkeepers? And which one does your business actually need –  a CFO, an expert accountant,  an amazing bookkeeper or maybe all three.

What do bookkeepers do?

• Processing transactions, invoices and receipts
• Handling payroll management
• Reconciliation and management of accounts and ledgers
• Managing accounts payable and receivable
• Preparing and lodging business activity statements (BAS) and net GST paid to be paid or refunded

Qualifications of a bookkeeper

Part of a bookkeeper’s job involves tracking transactions to prepare for a business’ lodgement of BAS. As a result, bookkeepers are often required to obtain BAS agent certification from the Tax Practitioners Board. In Australia they must have at least a Certificate IV in bookkeeping or accounting to apply to become a BAS agent.

What do accountants do?

• They can perform the same tasks that bookkeepers offer
• Structure your business from a legal perspective 
• Offer tax advice and planning
• Compile financial statements and reports
• Complete and submit tax returns
• Perform business performance analysis
• Auditing functions and ensure regulatory compliance
• Setting up your accounting software

Qualifications of an accountant

Accountants are technically more qualified than bookkeepers and tend have a broader role which includes an increased liability. A CA or CPA is the highest degree of certification for a practising accountant and  the most difficult certification to obtain in this area, therefore these people will generally command a higher billing rate.

Accountants must be certified by one of three professional accounting bodies in Australia: the IPA, CPA, or ICAA. To be accredited, they must have a bachelor’s degree in accounting. You can search any registered, suspended and deregistered tax and BAS agent and tax (financial) adviser on the Australian governments’ TPB Register.

What do CFOs do?

• Set, monitor and implement the company business plan to best deliver on the Owner’s goals and underlying motivations
• Act as a sounding board & devil’s advocate for the Owner/CEO
• Focus on strategic financial management including recommendations backed by analysis & past experience 
• Ensure strong foundations are in place for future growth
• Access cost efficiencies
• Review the structure of the business for optimum performance
• Play a pivotal role in growth plans, including the access to funding when required

Qualifications of a CFO

CFO’s have the same academic qualifications as an Accountant, however they also have years of commercial experience, having worked at a senior level within multiple organisations often spanning many different industries.

Should the decision come down to costs, how much should you allow?

It truly is as long as a piece of string.  An accountant may be more expensive than a bookkeeper as they are more qualified and can perform more complicated tasks for your business and are generally more legally liable. But a great Bookkeeper can be a similar cost especially if situated in one of the big accounting firms which bring with it vast expertise and deep industry experience.  A CFO may look like they cost you more but it all depends if they join the company full time, what role they play within the business and industry experience. 

Nowadays, thankfully,  outsourcing is a viable option for all three. This is a great alternative for smaller to medium businesses (SMEs) as they can use this resource as required (1-2 days per week to as little as 1 day per month) so for an example a part-time CFO means SME businesses can have the expertise of a high calibre CFO at a fraction of the full time cost.

So does my business need a CFO, an accountant, or a bookkeeper?

If your business needs help with simpler tasks such as payroll management, managing accounts receivable & payable, and lodgement of BAS, it is best to hire a bookkeeper. If your business needs a registered professional to prepare your business’ year-end financials, lodge tax returns, or provide advice related to structural matters, it would make sense to engage an accountant. 

If you want to grow, sort out cash flow issues, get help with funding, improve monthly reporting and cost efficiencies, and have someone on tap to use as a sounding board and to share the responsibilities of running a SME, then a CFO is worth looking into. Any or all of these can be done on a permanent, casual or outsourced basis.

It ultimately comes down to the size and complexity of your business.  It is common for an SME to have a combination of all three, with each playing to its strengths. The important thing is ensuring the business has the right people at the right level and is only paying for what it really needs. With the viable options of casual or outsourced personnel, all is within reach to get the best possible personnel required for a successful 2022. 

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TP24 Australia (www.tp24.com.au) is an alternative lending fintech company that provides Australian businesses with progressive receivables-backed line of credit solution (invoice finance) of between $200,000 to $3 million. Launched in 2019 we give Australian businesses a flexible, fairer alternative to banks and other lenders, allowing them to manage cash flow, allow for rapid growth or just to tackle the everyday business challenges. Get in touch today contact@tp24.com.au