What is the difference between a CFO and an Accountant?


So, you already have a Bookkeeper, Tax Accountant and a Financial Planner.  All these people require special qualifications and experience in their area of expertise.  How is a CFO different and why do you need one?  We offer part-time CFO services through-out Sydney to assist small business owners, see our website at www.ExemplarBusinessAdvisors.com

A CFO will work with you regularly to advise you on how your business is tracking and will know in advance when there is a problem in your business.  It is too late at the end of the year to take action and reverse what has been done.
You may know in your head what you plan to do, but a good CFO will have it in writing and will tie your budget and cashflow back to your actuals.  Up-front your CFO will help develop KPIs during a long-term strategic planning session which are tailored to your business. This will enable you to change direction if your business suddenly experiences a downturn.  In fact these triggers will identify problems well before it is known in your monthly Profit & Loss report.
Your CFO will ask you questions such as;
What’s this? Why is this expense being coded this way?  Why is your gross margin bouncing around?  And more importantly, what is causing the fluctuation? They will analyse your profitability to find out where the problems are coming from?
Monthly meetings are important as they enable a two-way discussion and hopefully other staff members can be invited in to a separate meeting to help train them on what can be done differently and why.  A CFO is your second-in-charge and can help you chair those meetings or take control while you concentrate on sales.  It depends on your style and how much you want them to get involved.
So you may ask yourself, “why hasn’t my accountant ever asked me these questions?”  Did you hire your tax accountant to coach you, or did you hire them to do your taxes?  At this point, you may realise your accountant is not a CFO.
Accountant – Compiles financial statements from accounting data
CFO – Plans, considers and decides how financial information should be presented, consistent with your objectives and strategies of the business.
Accountant – Works mostly in the past, from historical data
CFO – Plans, forecasts, budgets and projects the future performance of the company based on your objectives and strategies
Accountant – Delivers financials weeks or months after close of accounting period
CFO – Analyses results and prepares information in time for monthly management meetings within days of the end of period
Accountant – Prepares financial statements in accordance with tax office requirements
CFO – Highlight warning signals in advance so you can do something about it, reports are tailored to the business owner requirements in line with their objectives and strategies
Accountant – Assumes you will read and understand the financial statements
CFO – Makes certain you understand the financial trends and the issues that are important to running your business.  Has regular meetings with you to help you understand what the results mean from a practical perspective.
Accountant – Does what they are hired to do, that is taxes, mid-year planning, compliance and audits
CFO – Does what they are hired to do, that is help you strategise, plan and operate your business to maximise your growth.

Written by

Sylvana Livissianis

CPA and Business Advisor

26 October 2015