As a business owner, do you know the difference between a CPA (Certified Public Accountant) and a CFO (Chief Financial Officer)?
In the finance world, there are a lot of terms thrown around that even those who run a business sometimes don’t fully understand. And there’s no shame in that! You started your business because you’re passionate about your particular industry, and sometimes there’s just no time to brush up on all the financial jargon.
However, if you’re looking to take more control of your business’ finances, or would just like to be more “in the know” about what’s going on financially, these are important terms to be familiar with and know the differences between. Here’s our breakdown:
Chartered Professional Accountant (CPA)
To put it very basically, CPA is a professional designation for accountants in Canada, with CPA Canada being the organization that represents the profession. When an accountant has CPA after their name that means they have completed:
- a university degree (or equivalent);
- a couple of years of practical work experience;
- and professional level exams in order to receive the CPA designation.
In addition to this, an ongoing 40 hours a year of professional development is required to maintain the CPA designation. In other words, if you’re hiring a CPA in Canada, you can pretty much guarantee you’re hiring someone incredibly knowledgeable and trustworthy! They’re someone you know you can rely on to provide the best advice on how you should reach your short and long-term goals or improve your financial results.
What Does a CPA Do?
We’re of the mind that most businesses can highly benefit from having a professional accountant on their team, whether that be someone who can be visited in-person, or a virtual accountant, like us!
Having an accountant oversee your finances gives you more insight into your business, equipping you with the knowledge and confidence to make better, more solid business decisions.
A CPA can help you identify problems before they become serious, and in times of financial difficulty, they’ll be able to help guide you with expert advice. Plus, in the event of an audit or other challenges, you can be certain that your accountant will have all the detailed records you need to make your way through. And do you absolutely dread tax time? Well, a CPA can help you out there too! Taxes are one of the main things for which CPAs are hired to handle. We’re basically tax wizards!
Even though adding an accountant to your team is an expense, in the end, it can save you a ton of money and trouble.
When To Hire a CPA
You don’t need a large business in order to work with a CPA. In fact, a CPA can be useful for any size of business, especially for those just getting started who require start-up counselling, need help putting a business plan in place, or need help securing financing.
CPAs are hired by people in government, education, not-for-profits, and the public sector. They are also more affordable for smaller companies to work with, whereas a CFO can be more costly.
Chief Financial Officer (CFO)
A CFO, or Chief Financial Officer, is a senior-level executive in a business who manages the finances, promotes financial stability, and encourages fiscal success.
What Does a CFO Do?
A better question might be, what doesn’t a CFO do? Because when it comes to a company’s finances, they pretty much do it all!
A CFO oversees a business’s daily financial operations, resource allocation, and changes to capital and profit. They work with the finance and accounting department to predict the effects of operational decisions, providing strategic advice on the efficiency of expenditures as well as anticipating and promoting future trends. To ensure the company is within budget, they also manage and approve their organization’s financial decisions.
These are just some of the things a CFO does. However, the specific duties and responsibilities vary slightly depending on the company they are working for and the size of the budget. For a list of all possible tasks a CFO can perform, click here!
When To Hire A CFO
Deciding when to hire a CFO can be tricky. Hire one too soon, and you may not be able to afford them—hire one too late, and you may miss out on chances to push your business forward.
Typically, CFOs aren’t hired by smaller businesses. Most businesses do not hire CFOs until they’re making $50 million in annual revenue. At least, not in-house!
But what if your business isn’t yet big enough to warrant or afford an in-house CFO, but you’d still like to bring one on for your growing business, or to help manage persistent challenges? That’s where an outsourced or virtual CFO can help… and yes, The Number Works offers this service!
Virtual CFO Services
A virtual CFO is a great choice for smaller but growing businesses who’d like some of the advantages of a CFO, without the hefty price tag.
While a virtual CFO won’t physically be in-office with you, they’ll always be one phone call, Zoom chat, or email away! And as your virtual CFO, our number one goal is to help you grow your profits so you can continue to “level up” your business.
If you’re wondering if our virtual CFO services could be a good fit for your business, don’t hesitate to contact us for a FREE 30-minute consultation!
Think a Virtual CFO or CPA is Right For You?
If you’re looking for a virtual CFO or virtual CPA for your business, we at The Number Works are willing to answer the call!
Located in Hamilton Ontario, we’re a virtual financial coaching and accounting firm that is passionate about partnering with small businesses and creative entrepreneurs who are looking to grow their businesses and profits.
If you feel like a virtual CPA or a virtual CFO is something you could benefit from, get in touch with us today. Let’s talk!