Well, I picked a couple “wordy” topics to start this blog off, didn’t I? What does a CFO and a Controller do, and do I need one for my small-medium business? This is another great question.
Maybe the first way to describe the two roles, would be to discuss what it would look like in a very large company, with multiple layers of accounting staff and $50M in annual sales. In a company such as this, there would be the following simplified hierarchy in the Accounting/Finance department.
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- CFO
- Controller
- Accounting staff (typical roles include Accounts Payable, Accounts Receivable, Payroll, Supervisors, and other clerical positions.)
Ok great, so a CFO is above the rank of a Controller, but that doesn’t tell us very much. What else can we say about the two? And how does Boost CPA’s monthly services fit into this?
To get more specific, and without going into too much accounting jargon, I would say this: Most people would define a CFO as a role that primarily looks forwards, and a Controller as one that generally looks backwards. What does this mean in practice?
Controllers: Looking backwards:
- Internal control measures to prevent against entry errors, fraud, security breaches, etc.
- Oversee the bookkeeping and data entry staff
- Making sure historical accounting records are in order. Errors fixed, items recorded in correct manner, tax compliance performed and filed on time, etc.
- Monthly closing procedures and financial reporting of historical data in standard formats. I.e., income statements, balance sheet accounts, income by department or project, etc.
- Dealing with external auditors, government agencies, etc.
CFOs: Looking forwards
- Financial strategy and overall guidance of the company.
- This work does lean on the accuracy of the Controller’s work, but the CFO takes this work and interprets, analyzes, and extrapolates from it and other data to paint a picture of the future to guide the company’s decision making.
- That is a long way of saying, they use current data and future goals, to craft the financial pathway to achieve it.
- Advanced, customized reporting and analysis for management/owners:
- This is the type of reporting that goes under the hood, to really analyze a company’s results.
- Creative analysis of the metrics of a company, deciding which are the real success drivers, and finding ways to slice and dice that data to inform decisions. This can take many forms and would vary depending on the company and industry but suffice to say this goes far beyond providing general purpose income statements and monthly reports.
- Stakeholder interactions and reporting:
- External stakeholders (i.e. boards of directors, lenders, and investors) will need to see reliable data packaged in an attractive and useful manner and according to proper accounting standards. This often falls on the CFO to perform, relying on the accuracy and timeliness of the Controller’s work. This also relates to….
- Fundraising Assistance:
- Whether you are looking to take on or renegotiate debt, or looking to attract investment, a CFO will lead this process for you. They will make it as hands-off as possible for you, freeing you to run your business while they create all reports needed, manage timelines, and tell the financial story behind the numbers.
- Side note: This has come up twice here, “the story behind the numbers”. I’ve heard it said that when a non-numbers person sees numbers, that’s all they see. But when a numbers person sees numbers, that person sees the story behind those numbers. This is what a CFO offers for companies…the ability to see a story where most people just see random digits on a sheet of paper or on their screen.
So, now that we know what the roles are in a massive company, why should you care as a small business, and how does what we offer at Boost CPA fit in?
Put simply…You should care, because as a business owner of any size, these tasks still need to be done. Someone still has to think about the strategy of the company, its cashflows, its performance, and it’s future. Someone has to oversee the accounting data to protect the business from costly errors and fraud. It is often just falling on the owner to do these things, or they go undone (the worse option). And the questions the owner needs to answer are – is doing this myself the most efficient use of my time? Will I spend hours and hours dealing with something, that an expert in the field could do in less than 1 hour, with greater confidence and accuracy? Do I have the expertise to perform these roles at all?
This then brings us to the final part – How does what Boost CPA offers, fit into this?
Easy; it fits in by performing both roles all in one. Smaller businesses don’t need a full time Controller, nor a CFO, but they do need what these roles offer. It’s just needed in proportion to their size. This is where the fractional in “Fractional CFO/Controller” comes in. All our monthly services include elements of these roles, just in proportion to what typical clients would need at different stages. The smaller packages focus a bit more on Controller services, and the larger and the custom packages typically include more of the CFO range. But in all packages, we will perform all the above tasks from both roles, as they are necessary to do so as they arise.
So what are our service packages? Well our page for that is here, but summed up in a different manner, they are:
The Boost:
- Our entry level package, this one has us typically working with owners who perform the basic bookkeeping functions with our instruction, support, and oversight. We review their work, provide feedback for improvement, and gently nudge them along to make sure they stay on top of things.
- We will handle the sales tax and payroll tax filings, provide compliance reminders for items that we don’t directly handle of yours, etc.
- Annual corporate & personal tax returns
- We will provide standard financial reports with some additional insights and analysis from the CFO level.
- We will provide annual CFO strategy calls and annual financial goals report and set these goals with you
- We will help you with obtaining loans or financing should the need arise, and be your financial representative to external stakeholders
The Big Boost:
- Our higher-level package, this one has us typically working with businesses where the owner no longer has enough time to deal with the bookkeeping or payroll and needs to outsource all of that to us.
- We will handle all the bookkeeping, payments, payroll processing, and all-around business taxes compliance filings, leaving very few things if any to the owner.
- Annual business or corporate & personal tax returns
- We will provide more detailed financial reports with some additional insights and analysis from the CFO level.
- We will ALSO provide additional, in-depth analysis, drilling down into KPIs (or Key Performance Indicators…us accountants LOVE acronyms), future orientated forecasts and budgeting, variance analysis, etc.
- We will provide quarterly CFO strategy calls and quarterly financial goals report and set these goals with you
- We will help you with obtaining loans or financing should the need arise, and be your financial representative to external stakeholders
Custom Packages:
- Our custom packages are perfect for clients that already have a bookkeeper in house, or perhaps even a team of them, and are just looking for the professionalism, oversight, and analysis that a CFO/Controller can provide.
- With these, we are typically working with larger businesses, clients that are facing their first audits (arising from lending or investing arrangements), etc.
- However – we can customize our involvement with any size company. Contact us to discuss your needs.
These service levels are guidelines, and there is often some slight customization to be made for each client. But the overall theme is this: What you are getting in return for your investment in your company’s finance function, is going to be one that is well worth it. From freeing up your time (your time is money too!), freeing up your mental and physical capacity to spend more time doing what you do best in your business, helping you make better decisions about your company (what clients to take, what lines of service/products do the best, hiring decisions, overall business strategy, etc.), and helping prevent costly errors and omissions, involving a CPA like us really is an investment in your company’s wellbeing. And your personal wellbeing too.
The bottom line: Boost CPA was created to bring these services to businesses that need them, at rates they can afford, that are often under served in these roles. This is what we specialize in. We are not a stereotypical accounting firm…we are agile, we are entrepreneurial, we are nerds about accounting and small business, and we are on your team.
Book a consultation with us today and see if we are a good fit to make it official.