I was recently asked this question by a bookkeeper who was looking to expand his service offerings to include CFO services. As I thought about the best way to frame my answer, I realized that to answer this question, it’s helpful to understand CFO responsibilities within a larger organization.

In an organization large enough to have a CFO, the CFO is responsible for the overall financial performance of the organization. The CFO is responsible for the accounting department and in addition to reporting on past results and interpreting them within the context of the organization’s operations, is required to oversee related financial functions including financial analysis, budgeting, cash management and financial forecasts. Since a major cost component of many organizations is the human resource component, CFOs are typically responsible for HR department. A CFO needs to have experience or capabilities around employee benefits (health and disability insurance and retirement plans including a 401k and pension plans). Beyond benefits, the CFO should have an understanding of market forces that dictate compensation requirements for qualified personnel and the ability to design or administer, in conjunction with qualified HR management, an equitable compensation program. In some organizations, the CFO also has ultimate responsibility for the information technology services (alternatively, this function falls under a CTO).

In a larger organization, a number of staff accountants fill the “bookkeeper” role, including A/P, A/R, fixed asset management, and account reconciliation. The accountants performing these functions are typically part of the accounting department that reports through a chain of command to the CFO at the C-suite level.

A small business doesn’t have the volume, complexity or resources for an accounting function, and in fact frequently the entire financial function is managed by a bookkeeper who has had varying levels of accounting or software training. Small businesses, wanting to save money on a function that is frequently viewed as a cost center, forgo more sophisticated assistance with financial analysis, preferring to manage by the bank account balance and getting by with enough financial information to satisfy their tax preparer. When a small business then is looking for services that fall under the typical CFO umbrella, they turn to the only financial person in the organization: a bookkeeper who has little if any experience with financial analysis, how to do cash flow, employee benefits, and compensation..  

The recent proliferation of cloud-based accounting software has provided fertile ground for forward-thinking software developers who have created a number of products that provide the ability to forecast, perform what-if analyses and cash flow projections based on the underlying accounting data. This opens the door for bookkeepers to expand their offerings, at times without a solid financial background and broad experience. At Deep Dive Financial, we rely on a depth of Big 4 experience in tax and management consulting. Our affiliation with aBizinaBox allows us to use best-of-breed software and sophisticated integrations to bring enterprise-level solutions to our clients. Our experience allows us to take an enterprise-level view of the organization to develop efficient solutions. We believe that software doesn’t take the place of experience or professional judgment. Rather, we use software to inform solutions within the context of our experience and professional judgment. To find out more about our capabilities, contact Diana Halenz, CPA or Jordan S. Zoot, CPA.