Which One is Best for your Business?
The first person to whom you should ask this question is your CPA. Your CPA should not be the one doing or filling the role of bookkeeper, controller or CFO. Why? First of all, they are too expensive; and second, they should remain independent and at an arms-length from the day-to-day operations of your business.
If you do not have a CPA, I strongly advise you to interview a few good, reputable firms and retain one you feel comfortable with and that you like and trust. You do not want to rely on accountants who are not certified, or enrolled agents or tax services. If you want to expand and grow your business, CPA’s can grow with you. They will be the most up-to-date on all tax and accounting laws and changes. The others might not.
This is how most companies start out when it comes to financial reporting. Sometimes small business owners use their spouse or family members for this function. It is not advisable to do this. You should either be outsourcing this function or hiring a person or firm that does bookkeeping as their profession. No matter what, hold them accountable for performing their duties and fulfilling their job description.
Having a controller is usually the next stage or level of financial reporting when you outgrow a bookkeeper. A controller is as much a hands-on financial person as a bookkeeper, but with a lot more knowledge of accounting and finances. This person should be the owners’ go-to-person when it comes to how financially weak or strong the company is at any given time.
CFO – Chief Financial Officer
CFO’s are generally hired when a company reaches a certain size, has an internal accounting department, and needs someone to oversee all accounting functions, financing for the company, and working intimately with the owner on the future growth and vision of the company. The CFO also is usually the front person that deals with the company’s banks and lenders. Sales in excess of $2 to $5 million can usually justify a CFO. A CFO should be considered the owner’s right-hand person.
Whichever person or firm you hire for ANY of the above positions, please perform your due diligence before you hire or engage them. They will be responsible for handling all of the company’s money and finances.
No doubt, you have heard all the horror stories of fraud, theft, and embezzlement. You can stack the deck in your favor by doing proper due diligence before you hire a bookkeeper, controller or CFO.
Do the following for all employees:
- Credit Checks,
- Background Checks,
- Criminal Checks,
- Personal and Professional Reference Checks.
Getting references from people you know and trust are helpful. Especially helpful are references from people who have hired and worked with your potential bookkeeper, controller, or CFO in the past for a long period of time.
This is just the tip of the iceberg in hiring, who is probably the most important employee you will ever hire. For more detail or a deeper dive into this area, feel free to contact us at AL Advisory Group.