CPA vs. CFO - Which is right for you?
Many clients are unsure about the difference between a CPA and a CFO. We don’t blame them - both are important roles within a company that serves its financial needs.
However, they cannot be used interchangeably. There are key differences in their approaches and expertise, and it is important to know the difference.
We believe that every business is different, which is why we offer comprehensive financial services. We are a “one-stop shop” for businesses to achieve financial success. Learn more about our services here to see if they are right for you.
Let’s discuss what the differences are between a CPA and a CFO, why they matter and how to choose the right one for you.
CPA vs. CFO - What’s the Difference?
A quick answer is that a CPA looks at the past, whereas a CFO plans for the future.
We can compare it to an editor versus a writer. A writer moves the story along, develops the characters, and figures out how to complete story arcs. An editor will take what is already on the page and make sure it follows the rules of grammar and is clear.
Let’s expand on that.
A CPA will look at your revenue and expenses that have already happened and ensure that they comply with regulatory requirements and standard accounting practices.
Much of a CPA’s role relates to taxes. This includes creating strategies to minimize a company’s tax burden and keeping records in the event of an audit.
A CFO creates the strategies that moves a company forward. Whether its raising capital, long-range operational planning, or creating a sustainable business plan, a CFO concerns herself with a company’s future. She will develop practical plans that allow a company to reach their short- and long-term goals faster and with more efficiency.
An editor is fine if the story is already complete. However, if you want a new chapter, it’s time to bring in a writer.
Why Do I Need a CPA?
Simply put, a CPA is going to save you a lot of headaches. As mentioned, their focus is on taxes. So many companies will retain a CPA to help them file their taxes and put systems in place to minimize their taxes.
Their knowledge of tax law and compliance will keep your company on the CRA’s good side - definitely something that every business should want!
In the event that the CRA does need further information, your CPA will have kept meticulous records that will make that process so much easier.
Why Do I Need a CFO?
Because the level of experience and advice that a CFO brings, they are not necessarily needed for every company. For example, newer start-ups may not require that sort of strategy yet.
However, as businesses grow, their needs shift. A CPA may not have the skillset or experience to provide value in your business’ next steps. Many businesses bring in a CFO when they are more established and need help with:
Reducing expenses
Reaching financial goals sooner
Optimizing existing assets
Predicting and creating long-term plans
Establishing strong systems to prepare for growth
Raising capital
Businesses who try to solve these issues themselves without the specific expertise of a CFO stunt their own growth. Put simply, a CFO is your secret weapon to take your company to the next level.
Why Does it Matter?
Successful businesses are built upon having the right people in the right roles.
If you use a CPA to build your financial strategy, you will be missing out. A CPA will give advice based on her understanding of taxes. She will miss a key element because she is not retained to understand your business goals and forecasted earnings.
If you retain a CFO without actually needing one, you will not be using your funds effectively or efficiently. You may get good advice, but it may be premature and you may be putting the cart before the horse.
What If You Had Both?
Both a CPA and a CFO need to have an in-depth understanding of your company’s business and finances.
Doesn’t it make sense to deal with one professional who can manage both roles? Of course!
That is what we do. At Jennifer Kapedani, CPA, we offer tailored solutions to match your companies financial needs. Our broad range of services, from bookkeeping to the strategic role of a CFO means that we are able to meet your needs today and grow with you.
For many businesses, it just makes sense and makes your planning easier. Additionally, by handling both roles, we are able to provide a comprehensive strategy that is based on our in-depth knowledge of your business.
If you would like to learn more about working together, we would love to have a call with you. Click on this link to schedule a call, so you can begin to feel more in control of your business’ finances.
