Facebooktwitterpinterestlinkedinmail

It’s not uncommon to have difficulty differentiating between the main financial professionals. Not only are the names similar, but they are also often unintentionally used interchangeably. However, despite how the titles may be used colloquially, there are distinct differences in knowledge, background, and expertise between Bookkeepers, Accountants, CPAs, Controllers, and CFOs.

Why the Differences Between Financial Experts Matter

Your business financials are important. They keep your company in business, pay your employees, and fuel your growth and success. Making a mistake in hiring financial experts to manage your company’s finances—such as hiring someone underqualified to oversee financial strategy or overqualified for general account management—can mean mistakes, missed opportunities, and wasted time and money.

A good way to think about it is like this: you wouldn’t get the vehicle’s transmission replaced or your fuel injector repaired at a quick-lube shop. While there may be individuals there that might have knowledge about these repairs—and might charge less than a full-service mechanic—their expertise day-in and day-out is in quick lube, and hiring them for a more specialized, complicated repair can mean a greater risk and could lead to more expensive repairs down the road. Conversely, going to a high-performance specialty shop for an oil change or to refill your windshield wiper fluid would be effective but much more expensive.

Instead, car owners go to the shop that fits the needs and goals of their service as well as the complexity and performance of their vehicle—whether that’s a quick lube shop for basic oil changes for the family SUV or to a high-performance specialty mechanic for a racing import.

In business, the same differentiation holds true. It’s important to understand the differences between financial experts and their roles and responsibilities to determine which fit your financial needs and the current performance and complexity of your company. This way, when you need to make a financial hire, you can be confident that you are looking for the right kind of expert.

What are the Main Types of Financial Experts?

The most common professional financial experts are Bookkeepers, Accountants, CPAs, Controllers, and CFOs. While there are some skills and duties that overlap, each of these financial professionals have different levels of experience and education as well as specializing in different areas of expertise.

1. Bookkeeper

A bookkeeper is in charge of recording financial transactions and keeping the books up-to-date, as the title suggests. Bookkeepers are generally in charge of payroll, processing financial transactions, reconciling accounts, managing accounts receivable and accounts payable, and preparing initial financial statements. Bookkeepers typically have at least an associate’s or bachelor’s degree in accounting.

2. Accountant

While an accountant is qualified to perform bookkeeping tasks, they’re generally more experienced in report preparation and interpretation than bookkeepers. Accountants typically have a bachelor’s degree in accounting. They’re typically experienced in bookkeeping, maintaining business accounts, and helping prepare simple tax returns.

3. CPA

While all CPAs are accountants, not all accountants are CPAs. CPAs have met specific state and education licensing requirements and passed the CPA exam. CPAs are considered fiduciaries to their clients, meaning they have a legal duty and power to act on behalf of and in the best interest of their clients. They’re also more experienced in tax code and strategy. In addition, only a CPA can prepare an audited or reviewed financial statement.

4. Controller

A financial controller oversees accounting allocations, reporting, and cash management. It’s wise to have a separation of duties between accountants and controllers so there is a checks and balances system. A controller is also in charge of the internal controls over accounting and financial systems. The controller will also likely oversee negotiating lines of credit and vendor agreements, as well as reviewing financial contracts. Lastly, the controller oversees the preparation of financial statements, as well as budgeting, budget-to-actuals, and basic financial projections.

5. CFO

The Chief Financial Officer, or CFO, should be as the name states the primary C-suite officer over all things financial. CFOs are high-level strategic experts.Unlike the previous roles that are “rear-facing,” meaning they are in charge of record-keeping and day-to-day finances, a CFO is forward facing. CFOs are experienced, high-level financial strategists. This senior executive oversees all financial actions and strategy within a company. While other financial roles are typically concerned with historical and present-day finances, a CFO is interested in the future. A CFO will analyze a company’s financial strengths and weaknesses, and will plan and execute strategies to maximize opportunities and positive outcomes. CFOs are also in charge of forecasting, systems (financial systems as well as operational systems, including costs and making sure every branch of the company is integrated into tracking and financial systems), troubleshooting challenges, or opportunities such as raising funds or M&As.

Financial Expert Roles & Responsibilities Breakdown

 Bookkeeper Accountant     CPA. Controller     CFO
Balance BooksX    
Payroll ManagementX    
Record & Classify TransactionsX    
Report PreparationXX X 
InvoicingXX X 
AP/AR Management X X 
Monthly Close X X 
GAAP Compliance X X 
Budgeting X XX
Interpret Financial Data   XX
Board Meeting Presentations    X

Download the Breakdown

Download a copy of the financial expert roles and responsibilities breakdown by clicking the image to the right or clicking the “download now” button.

Financial Roles & Responsibilities

About the Author

Preferred CFO founder and managing partner Jerry Vance of Utah

Tom Barrett is a skilled CFO with extensive experience. His financial expertise is key to helping companies with strategic financial planning, data analysis, risk assessment, budgeting, forecasting, cash flow management, and much more.

You may also be interested in...

Financial Advice for the New Entrepreneur

Financial Advice for the New Entrepreneur

Profitability is not just a financial metric; it’s a mindset that should permeate your business operations. By prioritizing profitability, you can grow your startup into a financially stable and sustainable business that can weather economic challenges and thrive in the long term.

Guide to HR Outsourcing: Strategies for Modern Business

Guide to HR Outsourcing: Strategies for Modern Business

HR Outsourcing for your business  In this dynamic and ever changing business landscape, the questions of "What is HR outsourcing?" and “Do I need a fractional HR team?” have become increasingly relevant. HR outsourcing is a strategic practice that involves delegating...

Managing Business Expenses in Inflationary Times

Managing Business Expenses in Inflationary Times

Inflationary times pose challenges, but with strategic expense management, businesses can navigate these periods successfully. By understanding the impact of inflation, implementing cost-cutting measures, engaging in strategic financial planning, and embracing sustainable practices, businesses can not only weather economic storms but also position themselves for long-term success.

Why You Need Fractional CFO Services in 2024

Why You Need Fractional CFO Services in 2024

Why You Need Fractional CFO Services in 2024  In the fast-paced, ever-evolving business environment of 2024, companies across the globe are increasingly recognizing the need for innovative financial management strategies. The US and global economy is in a state of...

20 Things Every Entrepreneur Needs to Know about Accounting

20 Things Every Entrepreneur Needs to Know about Accounting

While entrepreneurs don’t need to become professional accountants, having a solid foundation in accounting principles and practices will enable them to make informed financial decisions, communicate effectively with financial professionals, and ensure the financial health and success of their business.

Top Human Resources Strategies for 2024

Top Human Resources Strategies for 2024

Welcome to our insightful webinar featuring Tom Applegarth, a renowned expert in the field of Human Resources and our expert Outsourced Human Resources Manager at Preferred CFO. In this webinar, Tom shared with us his valuable strategies and insights for HR success in...

Is it Time to Sell Your Business?

Is it Time to Sell Your Business?

Deciding whether and when to sell your business is a significant and complex decision that should not be undertaken lightly. If the timing is right, the offer is right, and the necessary work is done correctly, selling your business can be highly beneficial. However,...

Understanding Organic Growth vs Inorganic Growth

Understanding Organic Growth vs Inorganic Growth

Business growth requires both organic and inorganic growth. Each method carries its own set of advantages, challenges, and implications for the trajectory of a company. Whether you are a startup or established enterprise, understanding the dynamics of organic and...

Management Development Unlocked Podcast

Management Development Unlocked Podcast

This episode of Management Development Unlocked marks the 50th episode! Eric’s guest is Tom Applegarth. Tom’s entire career has been spent in human resources at multiple companies, both big and small. Today, he is the Vice President of Human Resources for Preferred...

Empower Your Business with a Virtual CFO

Empower Your Business with a Virtual CFO

In today's dynamic business landscape, having a strategic financial perspective is more crucial than ever. However, not all businesses can afford to have a full-time Chief Financial Officer (CFO) on their roster. Many choose instead to utilize virtual CFO services – a...

Facebooktwitterpinterestlinkedinmail