Accounting is the language of business. So, to speak it can open many doors. However, it seems that most people know just enough to get by — but not enough to thrive. To help you better understand the world of accounting, we've compiled this guide to accountants and the various titles they can hold. It's not a clear-cut distinction, but understanding the differences between a Bookkeeper and an Accountant, or even a Controller or CFO, can come in handy when deciding who to hire for what kind of job - or when to outsource. So stick with us! Your understanding of accounting will be much more sound by the time you finish reading this article.
Bookkeepers are responsible for the day-to-day accounting activities of a company. They're the ones who record income and expenses, prepare financial statements, reconcile bank accounts and track receivables and payables.
Should I hire a bookkeeper? Yes, I would. When it comes to deciding what to do about the bookkeeping operations of your company, you should probably consider hiring a bookkeeper and not a person who is simply a skillful accountant.
Our previous post Why You Should Hire a Cloud-based Bookkeeper in 2021 is a great place to start.
Accountants are often more experienced than bookkeepers. They're highly skilled at analyzing financial transactions, performing audits and interpreting tax laws. Accountants also provide more generalized accounting services, such as financial planning, management consulting and payroll management.
Should I hire an accountant? That depends on the size of your company and your accounting needs. As you may have guessed, the bigger your company is, the more complicated your needs and transactions become.
Controllers are the financial managers of a company. They oversee bookkeepers and accountants who are directly responsible for financial record-keeping. They also make sure that staff members follow policies and procedures, compile regular reports and generally help run the accounting department. Controllers usually have broad supervisory experience, including experience in accounting or business management. They may have responsibility for multiple departments — finance, sales and marketing, operations, IT or customer service — depending on the size of their organization.
The acronym CFO stands for Chief Financial Officer; this person is typically the highest ranking accountant within an organization. CFOs are responsible for preparing the annual budget, communicating with outside investors and determining the company's staffing needs. Like controllers, CFOs are also financial managers. However, their main focus is to provide strategic advice and financial guidance to the CEO and other senior management team members.
We know that running a small business comes with wearing many hats. On a daily basis, businesses around Canada are managing cash flow, trying to plan ahead, and need legal and tax support - and often do not have the in-house resources to hire for that. So they look to outsource. But where to start? What if a company needs help with one or more of the following:
Virtualise the business model
Support International Expansion
Advice on diversification
Assessing impact on supply chain
General business planning
Increase data integrity
Operational decision making
One answer is to hire a Cloud-Bookkeeper - someone who can help grow your business with right-fit solutions, is comfortable with most aspects of a finance role, and who works within the framework of a larger firm which would normally have more resources and fractional (part time) capacity to help better steer your business.
Yes, it is a new and exciting idea. But it's not a new idea at all. In fact, if you think about it from the perspective of a CFO, there are obvious advantages to using hiring an outsourced virtual accountant - namely:
#1 - Avoid the risk of stretched resources resulting in poor service delivery or lost knowledge and expertise.
#2 - Widen your search for the best accountant with the most appropriate experience.
#3 - Target an increasingly mature and professional talent pool, many of whom have international experience.
#4 - Match the skill-set and experience of your business with those of virtual accountants who use cloud software applications to support you in making informed business decisions.
The majority of Canadian companies outsource one or more of their accounting services. In most cases, the extent of outsourcing is determined by your own in-house resources. If you have a full-time accountant on staff, it may be more cost-effective for you to simply outsource bookkeeping activities and focus on your core accounting skills. However, if your company is small and cannot justify hiring a full-time accountant, consider hiring an outsourced virtual accountant.
Not sure where to start? Get in touch with Eric at email@example.com for a free initial assessment of where you stand and what you need. The good news is that with today's technology and online resources, as well as the virtual outsourced work model, we are seeing a leveling of the playing field between SMBs and large corporations.