Whether you are just starting out or growing an established business, having the right people in place to manage financial operations and responsibilities is key to success.
But what roles should you look for when building your finance team? If you’re a small business looking to outsource financial services, it can be hard to know who to turn to.
With so many different titles being used — Accountant! Controller! Chief Financial Officer! — it can be difficult to understand what each role actually does and how they are different from one another.
In today’s business landscape, it is essential to have a financial team that can support your vision. When it comes to managing the finances of your small business, it can be hard to know who to turn to. While some of us might think that all financial professionals are interchangeable, the reality is that there are subtle differences between the roles of accountants, controllers, and chief financial officers (CFOs). Read on for a breakdown of their job descriptions and how they can best support your business.
Accountants work with businesses to ensure transactions are accurate and compliant with all accounting regulations. An accountant’s primary responsibility is to ensure accuracy in a company’s financial statements through reporting and recording financial information. They work primarily with numbers – preparing balance sheets, income statements, profit and loss statements, and other financial documents. This includes preparing financial statements according to the Generally Accepted Accounting Principles (GAAP), conducting regular audits, and making sure that books are kept up to date.
Accountants also provide advice on tax issues and help businesses develop strategies for saving money. They assist in completing taxes by making sure all relevant information is properly recorded before filing taxes annually or quarterly. Accountants also manage accounts payable, accounts receivable, payroll, inventory management, tax filings, budgeting, and internal auditing functions.
They are typically employed by larger organizations but may also work with smaller businesses on a contract basis. In short, they provide day-to-day assistance with the financial operations of a company. They are typically certified public accountants (CPAs).
Controllers have similar duties to accountants but operate on a larger scale. Controllers oversee the entire accounting department while making sure all processes are efficient and up-to-date. They are responsible for ensuring that all financial activities within an organization run smoothly. They are also responsible for developing budgets based on past performance as well as planning for future expenses.
They also oversee all accounting functions such as budgeting, forecasting, payroll processing, accounts payable/receivable management, cash flow analysis, inventory control, cost accounting and more. This includes supervising accounting staff as well as developing operational strategies for the department. In addition, controllers must stay informed about any changes in tax laws or regulations that could affect the company’s finances. By doing so, controllers can identify areas where cost savings can be achieved or suggest strategies that would increase profitability.
Controllers must have an extensive knowledge of accounting principles and tax laws in order to effectively manage their department’s activities. They also work closely with other departments within the company such as marketing and sales in order to help make informed decisions that impact the company’s overall financial performance. Controllers usually report directly to the CFO or CEO and can have ultimate authority over the organization’s finances.
Chief Financial Officer
The CFO is the head of all financial departments within a company; their job is much more strategic than either an accountant or controller’s position. They are ultimately responsible for the company’s financial performance as a whole. Chief Financial Officers are responsible for overseeing all aspects of a company’s finances including budgeting, forecasting, financial planning, and risk management. They lead strategic planning initiatives related to investments, financing decisions and capital structure while managing risk exposure through hedging strategies and other tactics.
CFOs are responsible for creating long-term plans based on analysis of current financial trends as well as forecasting future growth potential for the company. They present this information to executive management teams in order to make sound business decisions; they also work closely with investors who might be interested in investing capital into the organization. CFOs may also develop strategies for mergers and acquisitions as well as devise exit strategies if needed down the road.
The CFO is typically the highest-ranking executive in an organization’s finance department and will report directly to the CEO or Board of Directors on matters related to fiscal health. The CFO works closely with other departments such as IT, HR, operations and marketing in order to create solutions that align with the company’s long-term goals. CFOs must have extensive experience in both accounting/finance as well as strategic planning in order to successfully lead their team towards long-term success for their organization.
Making sure that you have the right people managing your finances is crucial to any successful business venture. Understanding the differences between accountants, controllers, and chief financial officers will help you determine which role best fits your needs at any given time. These three professionals play different yet essential roles in helping companies reach their full potential financially – from preparing accurate documents according to GAAP standards all the way up to developing strategic plans for future growth – so it’s important that you understand exactly what your business would get from its new finance team member(s).
With a proper mix of these roles on your financial team, you can rest assured knowing you have professionals who understand both short-term operational challenges and longer-term strategic goals helping guide your business towards success.