You would be surprised the number of times we’re asked to provide basic bookkeeping services or whether we can run a company’s payroll and as startup CFOs we get that many founders wouldn’t have had the exposure to understand the difference between an accountant and a CFO, so in this post, we’re going to clear up some of the most common misconceptions of what a CFO is and why we’re not your run of the mill grey-suited number cruncher. 

The first major difference is that an accountant is traditionally external to the business whilst your CFO sits inside – often as a member of the senior team. Even portfolio, outsourced or fractional CFOs whilst not employed by the business will be intimate with all the inner workings. 

Secondly, accountants tend to be task focussed. They will have monthly, quarterly or annual tasks (such as filing your VAT returns or annual accounts) and their measure of success will be getting those done on time. CFOs, on the other hand tend to be more project and long term focussed. What they do tends not to follow a specific routine because it is highly dependent on the state of the business as well as the macro environment at any given point in time. 

Accountants tend to look inwards and backwards. That is to say they focus on internal reporting of what has already happened whilst CFOs tend to look outwards and forwards. What this means is that they are constantly gauging the market, the competition, the opportunities and whilst they need to know what has happened they are much more interested in influencing how the business performs moving forward. 

Accountants tend to be technical whilst CFOs tend to be commercial. What this means is that an accountant can tell you why they have applied a specific IFRS or GAAP standard (accounting speak for technical treatment), a CFO will be more interested in the implications it has on a business’ performance. They will be focussed on customers, margins, automation, revenue and cash flow whilst accountants will be more concerned with controls, processes and the minutiae of debits and credits.

It’s worth noting that a strategic CFO is only really valuable for your company once you have hit certain milestones. That might be having secured your first customer and taken your first revenue or it may be when you raise external investment for the first time or even as you start to scale or look at mergers and acquisitions activity. And for them to do what they do well, it’s imperative that you have the basics in place in your finance operations which is where a great accountant can really help out.

So when you’re thinking about how to make sure you’re compliant and not going to run afoul of the tax man, that’s when you should talk to a good accountant, but when you’re ready to grow and can see a bunch of opportunities ahead of you but want to ensure you’ve figured out how much cash you’ll need, where it’s going to come from and what sort of return makes sense, that’s when the right strategic startup CFO can really make a difference.

Ultimately finance sits on a spectrum from the highly technical through operational and out the other side into the strategic, where most CFOs prefer to sit. Both roles are necessary in a fast growth venture but if nothing else, it’s important to understand that they’re rarely going to be filled by the same person. 

What do you have in your business right now and what do you think you need to supercharge your growth?