It is easy for people to get a little confused when you are trying to distinguish between CFOs and CPAs. Both of them deal with handling finances in some way, but they don’t necessarily share the same tasks or responsibilities. Today, we are going to discuss some of the different qualities and similarities that these two titles have in common.
What is a CFO?CFO stands for “Chief Financial Officer” which is one of the esteemed executive positions at a company, which is responsible for overseeing and managing any and all of the financial aspects of a business. Most CFOs have backgrounds in corporate finance, and have the necessary education, knowledge, and experience to
- Manage the company’s budget
- Know how to assess and manage the financial risks of your company
- Set financial goals based on the company’s performance
The CFO is one of the chief advisor to the CEO for anything regarding the financial position of the company and how they can improve their financial position in order to meet corporate goals and standards. CFOs are positions that are often held at larger companies that take in tens or hundreds of millions of dollars in annual revenue. CFOs do not need to be certified public accountants to fulfill their position.
What is a CPA?
A CPA is a Certified Public Accountant. Their services are usually contracted for outside of a company for tasks that include
- Keeping the books for the company
- Performing payroll services for a company
- Providing financial insights and feedback to manage your business’s taxes
CPAs are typically used by smaller businesses who need someone to manage their taxes, but don’t need or have the budget for a full time position to handle that for them. CPA’s can provide valuable information on taxes and tax law that can benefit the company.
Why Use a CPA instead of a CFO?
If you are running a smaller business and don’t have a host of executive officer positions at your company, you may want to contract a CPA to provide key pieces of financial and tax advice for your company. CPAs are usually best for developing a tax strategy for your business. Accountants are best for smaller businesses that already have a financial strategy, but need more help with managing their taxes.
Why Use a CFO over a CPA?Full time CFOs are better suited for larger companies who need full-time financial advisors. Whereas CPAs are more focused on the short term of doing what is best in terms of the business’s tax situation, CFOs are looking at both the short and long-term financial situation of the company and how to improve it.
Smaller businesses can now benefit from the expertise of a CFO by hiring a part-time CFO. CustomOne CFO & Controllers offers part time CFO and controller services assisting smaller to medium sized companies in Iowa. Call today to find out how we can help grow your business.