Frequently I’m asked about the difference between a bookkeeper, a Controller and a CFO. Most owners and executives know when their company needs a bookkeeper or when they need a CFO, but in between… that’s when it gets difficult to decide who to hire.
If you make the wrong choice it can cost you your business. The world of accountants and finance professionals is complex. Here are some of the lessons I’ve learned over the years on the subject of bookkeepers and CFOs:
- The accounting profession has as many specialties as medicine. Don’t expect everyone to be an expert in everything. Hire the essentials, outsource the specialties.
- Bookkeepers can not take your company public. CFOs don’t do payroll. Hire the right person to accomplish the right job.
- The good accounting & finance professionals pay for themselves. The bad ones can bankrupt your company either intentionally or unintentionally.
- Address poor performance promptly. Bad accountants do not get better with age.
- 40% of small businesses experience fraud and embezzlement. Trust your internal controls and intuition, not your personnel.
- If your company does not have timely & accurate financial statements, departmental and or project accounting, budgets, and a meaningful forecast process, you have the wrong Controller!
- If your company does not have budgets and departmental or project accounting, no one is in control of expenses.
- Controllers don’t do marketing well. Marketing Managers don’t make good accountants. Keep the marketing in Marketing and the accounting in Accounting. Your company does not need a duplicate set of books nor a second marketing plan.
- If the financial statements don’t make sense to you… they won’t make sense to anyone else! Find someone who can properly design them.
- There is no excuse for errors in accounting! Insist on error-free work! It’s a non-negotiable.
- Some of the best accountants & accounting managers do not have 4 year degrees. Some of the worst accountants have MBA’s from expensive schools.
- Garbage in is still garbage out… and you can not analyze garbage. Insist on proper and accurate transaction coding.
- Accounting professionals are much more valuable when they view their role as a business partner.
- Good controllers find resources for mission critical projects without exceeding the budget.
- Controllers that view themselves as the corporate police are left out of all the important decisions and never understand why.
- If your financial statements are printed with cents, you have a bookkeeper, not a Controller.
- If your Controller spends all of his/her time on spreadsheets, you have an analyst, not a Controller.
- The best CFOs, controllers and bookkeepers have a great sense for business, understand people and know their numbers!
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