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CPA, Controller, CFO - How do I decide what is right for my business?
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March 2013

CPA, Controller, CFO - How do I decide what is right for my business?

By Gary Colbert - CPA, Nperspective Tampa Managing Partner
 

One of the most critical keys to success for any business is having the right team in place to execute the business strategy.  When developing the team, the financial position is often one where deciding the right fit can be a perplexing decision.  This generally tends to be the case when the difference between a CPA, Controller or a CFO is not understood.

The best place to start when considering your need is to determine the quality of your existing financial information.  Financial information that is timely, accurate and, most importantly, understandable is a hallmark of a good financial reporting system.  Although timeliness and accuracy are must-haves, the information must be understandable for it to have meaning.  For most of us in business, "knowing what we don't know" is an important key to success, and good financial information and analysis will, more often than not, bridge the gap between "knowing" and "not knowing."

 

While it is possible to take available information and craft reports without the assistance of a seasoned financial professional, there are inherent limitations to this approach, which include:

  • It is a very time-consuming process for those who are not familiar with accounting systems and procedures
  • It detracts from other important day-to-day activities, such as securing sales or running operations
  • Decisions are limited by information that is available

Many businesses look to their CPAs to assist them with financial matters.  However, most don't understand the range of services that many CPA firms provide, and the focus of those services.  Most CPA firms focus their business on Audit and Assurance and Tax Planning Consulting and Compliance.  These core business practices are often augmented by Merger and Acquisition Consulting plus Business Consulting.  While they can assist in the provision of financial reporting information, many CPAs who have not worked in private industry may not understand the nuances of business operations, the unique characteristics of those businesses and the impact of these factors on financial accounting and reporting.

 

Some companies have made an investment in their financial management capabilities by employing a Controller to lead their financial functions.  A Controller typically handles all of the accounting needs of the organization, ensuring a continuous flow of information to management for making effective decisions.  These efforts will typically include:

  • Analysis and reconciliation of monthly financial information
  • Generate monthly financial statements
  • Ensuring the timeliness of payroll, disbursements, invoicing and reporting
  • Management of staff and reporting systems
  • Development and compliance with policies and procedures

So if a CPA or a Controller can satisfy my financial accounting and reporting needs, why do I need a CFO?

 

While basic financial accounting and reporting needs may be met by employing a number of different methods or utilizing different kinds of professionals, a key ingredient for business success is taking the information that is available to an organization, developing reporting metrics that tell a story and incorporating all of the information into a decision-making process that will lead the company in a successful direction.

 

The major functions of a CFO are to safeguard company assets, ensure that accounting systems provide and report timely and accurate information, and establish a planning process that yields the most beneficial deployment of resources for maximizing the company's performance.  While the first two functions may be accomplished by individuals who are not CFOs, it is those two functions in conjunction with the third function, deployment of resources, that define the difference between a financial professional and a true CFO. 

 

The deployment of resources is the end result of a planning process that defines a company's strategy, identifies existing, available and attainable resources, acquires the resources not yet possessed by the company, and coordinates the operational plan and budget to allow the organization to reach its objectives in the most efficient and effective manner possible.  A true CFO is steeped in operational experience that augments technical knowledge for accounting and financial management, and it is this experience that allows a CFO to bridge the gap between operational performance and financial performance.  This skill set allows the CFO to access needed resources for the company's growth that may otherwise not be available, such as bank financing and/or equity investment opportunities.  Having this CFO resource in an organization increases the value of information provided, the understanding of business operations, the resources needed to provide growth capital and, ultimately, improve the performance of the company.

 

There can be no substitute for strong financial and operational experience.  It is this combination that allows a CFO to be an effective member of a management team.  Nperspective excels at providing this resource to our clients with a model that makes it an affordable consideration for those who are in needs of seasoned financial management skills and expertise but who are not yet at a point where the investment in a full-time resource is necessary or affordable. Contact Janet Watson at [email protected] or 813.317.3460 with any questions or for additional conversation.
Did You Know?

Did you know that Nperspective was recently engaged by a rapidly growing health care services company to help prepare them for an exit in the next few years?  This engagement involves establishing a solid financial infrastructure including improving financial reporting by service line for better visibility into profitability, managing cash for growth, and helping build the right team so that this founder can maximize the value of this organization. 

 

Contact Janet Watson for more information.
Nperspective, LLC provides interim, part-time, and project CFO services using a flexible engagement model that is dependent on our clients' unique business needs.  Our partners are seasoned CFOs who focus on rolling up their sleeves, are accommodating to client needs and helping create significant value from within their finance organizations.