“I Already Have a Bookkeeper and a CPA: Do I Really Need a CFO?”

The PICPA defines a Certified Public Accountant as “a trusted financial advisor that has passed the rigorous CPA Exam, met work experience requirements, and takes continuing professional education courses to maintain their CPA certification.”

If you already have a bookkeeper AND a CPA, you can rest assured that your business is in good hands.

However, times are changing, technology is evolving and becoming a crucial part of your business, and the reactive, transactional nature of bookkeeping and CPA services is no longer enough for forward-thinking business owners who need to maintain a cutting edge on their competition.

As more and more businesses use software as a service (SaaS), e-commerce, digital marketing, EDI, online payments, and maintain cybersecurity controls to run their businesses, the sheer volume and complexity of running a small business have grown exponentially over the years.

Today, many business owners are enjoying the benefits of proactive financial leadership, cloud-based accounting, software-enabled business processes and around-the-clock support that requires more than studying this year’s GAAP and FASB updates…

Enter, the Virtual CFO.

The “New Breed” of accountant and the rise of the Virtual CFO

The proactive financial professional (often referred to as a virtual CFO or virtual controller), is proactive, educated, tech-savvy, and assertive. She has industry expertise, knows your industry well, leverages cloud accounting software and other technologies to make your business smarter, faster, and stronger, and she knows how to seamlessly integrate “just doing the books” with, “Hey John, I noticed you undercharged these three clients last year by $2,000 each, let’s fix this today.”

The proactive virtual CFO is the secret weapons of thousands of businesses across the country who unlock thousands, even millions of dollars in profits for their businesses and run vastly more efficient and valuable enterprises.

Virtual CFO Services

The virtual CFO is not just an individual, but often comes with a fractional share of a complete accounting team that includes virtual bookkeeper, virtual accountant, a virtual CPA and even a virtual mergers & acquisitions professional. Virtual CFO services often include:

The virtual CFO is not just an individual but often comes with a fractional share of a complete accounting team that includes virtual bookkeeper, virtual accountant, a virtual CPA and virtual mergers & acquisitions professional. Virtual CFO service values often include:

Mentor the finance team: Oversee your in-house finance team or handle 100% of the bookkeeping, accounting, and finance functions with the outsourced virtual team she brings.

Develop financial controls and policies: Develop cash controls, best practices, and proper reporting policies to protect your bank account from financial theft, fraud, loss and compliance missteps.

Deliver financial reports & Key Performance Indicators (KPIs): Pull meaningful information including customer acquisition cost (CAC), staff leverage, annual contract value (ACV), and others that show you in real time if your business is growing (or worse…suffering).

Leverage cloud accounting software: By leveraging cloud accounting software like Xero, your virtual CFO handles bookkeeping, reporting, and execution anytime, anywhere, with valuable flexibility in developing reports and automation that save time and money.

Create budgets & forecasts: Help managers and shareholders make profitable decisions and forecast cash flow to invest in growth or return cash through distributions or dividends.

Run startup operations: A skilled virtual CFO can manage cap tables, investor reporting, startup operations, and manage angel and VC investors.

Drive strategy and growth: Your CFO will provide proactive leadership for your finance team, drive strategy and cost-savings initiatives, and unlock value for shareholders.

Record sales transactions: Record cash and credit sales in-store, online, in real time, in batches, ech day, week, month, quarter and year.

Manage cash: Receive, deposit, and record flows of cash including, checks, credit cards, PayPal, ACH, wire, Shopify, EDI, and manage accounts receivable while calling customers to pay their invoices.

Reconcile accounts: Compare bank, credit cards, sales ledgers, expense reports and dozens more between your books and your bank accounts, third party providers, credit card companies, and receipts.

Store documents: Maintain years of document history for compliance, audits, and taxes including receipts, reconciliations, expense reports, regulatory filings, and more.

Pay bills: Create purchase orders, order supplies for clients and the office, pay all your vendors, manage accounts payable and balance payables, receivables, and cash on hand to make sure you have the working capital you need to run your business.

Run payroll: Collect time sheets, enter data into your HR system like ADP, pay employees, collect and remit payroll taxes, add and remove new staff, and stay compliant with staff records and state filings and annual W2 distribution.

Record accruals: Accrual accounting (GAAP) matches revenue and expenses with time periods and consumption and requires a deep knowledge of your industry, unique business processes, and tax and accounting laws to guide you in the right direction.

Pay taxes and maintain compliance: All businesses pay some form of taxes and must maintain accurate bookkeeping to calculate them. Examples include paying sales taxes, franchise taxes, state and local taxes, and other industry specific fees and tariffs.

Create reports for management: Business owners need to be updated regularly on cash flow, budgets and forecasts, and customer issues in order to make informed decisions to grow the business each month. Creating the right reports for each business requires knowledge and experience.

Other tasks: Believe it or not, most business owners have their “bookkeepers” do much more than bookkeeping. They answer phones, file paperwork, handle customer service and serve as hybrid employees who have many responsibilities. Many times, this creates confusion for new employees or when exploring outsourced accounting services, since a true bookkeeper or accountant handles just this: bookkeeping and accounting.  

What most bookkeepers are missing

The tasks listed above are primarily reactive in nature, and require a fundamental skill set that most bookkeepers already possess. This is good news for most business owners.

However the truth is, most bookkeepers are looking to make a good living, do a good job at work, and go home to their families without rocking the boat to upset normal flow of business. After interviewing hundreds of bookkeepers and helping dozens of companies, we know this is the truth!

So, what’s missing from your current bookkeeper relationship?

First, consistently taking action on these tasks and delivering a level of quality that would satisfy a CPA and a CFO is the first step. When you have been in the same position for many years, it is easy to get comfortable and miss critical errors and fraud, no matter how small at first.

Second, having accountability, and being able to execute, day in and day out, 7 days per week (not just Monday through Friday), is difficult for one person. Also, having a second or third pair of eyes to review this work and provide feedback would be a great benefit to most CEOs. A lone bookkeeper often has complete control over the finances without any controls over cash or reporting, and is a risk point you should beware of as a business owner.

And finally, providing proactive and meaningful financial reporting and analysis to make sense and draw conclusions from the transaction-level detail is the key function that most bookkeepers do not provide.

If we have posed interesting questions to you, please continue to the next page:

What are typical accounting costs for hiring and outsourcing?