In a previous article, we have talked about the differences between Bookkeepers, Controllers, and CFOs. As we have outline, while these roles may have some overlap, they have distinct responsibilities and functions. It is important to ensure that you engage a person with the right skill set to achieve your objectives. In this article, we further describe each role and also talk about when is the best time to hire each of these roles.
The Role of a Bookkeeper
A bookkeeper is responsible for entering all financial transactions into the accounting system. They essentially ensure that all invoices, expenses and payments are correctly and accurately entered into the accounting system. A bookkeeper can also assist with payroll processing and HST/GST compliance. They are focused on the day-to-day financial operations of the business and work to keep things running smoothly.
A bookkeeper will normally be the first person that a start-up company needs to ensure that all financial transactions can be captured to enable the company to manage the business, meet its reporting needs and facilitate tax compliance.
The Role of a Controller
A Controller manages the financial operations of a business. Controllers are focused on ensuring the accuracy of financial data and ensuring compliance with accounting and tax requirements. They will normally oversee financial reporting (including external reviews and audits), financial process design and implementation, developing finance policies, financial forecasting, and management reporting and analysis.
As a company grows, a Controller may be the second finance individual added to a team to ensure that the company has transparent, accurate and timely financial information and analysis to drive decisions.
In a startup environment, a Controller will normally be required when the company’s financial reporting becomes more complex as a result of of factors such as increased revenue, investor reporting requirements, geographical or product expansion, or compliance.
The Role of a CFO
The CFO is responsible for managing a company’s financial strategy, fundraising, financial planning and analysis. A CFO will be able to work cross functionally with other departments to effectively forecast growth and ensure strategic alignment across the organization to achieve the company’s goals. CFOs also manage financial risk and ensure that the company is financially stable and well-positioned for growth.
A startup will normally need a CFO when their financial operations become more complex either through rapid growth, investor or funding requirements, capital raises, or external factors such as compliance. A good CFO will be able to help manage that complexity and provide the visibility required to make sound decisions.
As you can see, Bookkeepers, Controllers, and CFOs all play distinct and important roles in the effective management of a finance department within an organization. It is important that you consider your company’s needs when building your finance team to ensure that you have somebody with the appropriate skill set for your stage of company. If you decide to outsource your startup accounting or bookkeeping, working with a firm that has the ability to grow along with you and offer strategic financial advice at the Controller or CFO level is a good way to go. Not only will you get your compliance stuff taken care of but you will have access to a strategic sounding board to help you with the really valuable and hard stuff.