We are often asked ‘what is the difference between a bookkeeper and a Virtual CFO (Chief Financial Officer)?’
When it comes to your business, it can be difficult to know what you really need. Especially if you’re not completely sure of who does what.
To help you to find the perfect fit for your business needs, here are the main differences between a bookkeeper and a Virtual Chief Financial Officer.
How Does a Bookkeeper Help my Business?
A Bookkeeper’s main task is recording your business transactions. This includes your sales, purchases, payroll, and accounts receivable and payable, to name a few. It can also include bank reconciliation, record keeping and producing some basic reports.
However, a bookkeeper is not a qualified accountant. They log and organise the figures, but rarely influence business decisions. They more than often don’t prepare and present a complete set of accrual based accounts.
As such, the financial statements that a bookkeeper will prepare are usually reviewed by an accountant, financial controller or CFO.
Bookkeepers are becoming increasingly comfortable with using cloud-based accounting software.
But, their services are often limited to the number crunching side of your finance needs.
How Does a Virtual CFO Help my Business?
Unlike a bookkeeper, a Virtual CFO can offer you far more than just bookkeeping tasks. A Virtual CFO can act as your complete outsourced financial function.
Not only can a Virtual CFO provide you with expert bookkeeping, they can also handle your accounting tasks – all while utilising the latest technology and innovations to speed up your processes. As well as manage cash flow, assist in strategy decision making and risk management and prepare more detailed and complete reports that can give you the ability to make informed financial decisions about your business.
More than that, utilising a Virtual CFO gives you access to a far wider skillset than that of a bookkeeper. A bookkeeper’s duties will rarely change, whereas a Virtual CFO has the capability to evolve along with your business, offering you:
• Complete financial statements
• Monthly review of financial performance
• Strategic advice & Planning
• Budget and forecasting preparation, analysis and tracking
• Performance monitoring & analysis
• Analyse Customer profitability & Pricing of services
• Control costs
• Taxation Advice
• ATO & ASIC Compliance
• Finance process reviews
• Cloud accounting advice – including but not limited to MYOB & Xero
• Training & Coaching for Team & Business Development
Further, if your Virtual CFO is also your End of Year Accountant and Tax Agent, this gives you the advantage of only having to deal with 1 organisation in regards to your finances which can also lead to reduced accounting costs at the end of the year.
Which is better for you, a Bookkeeper or a Virtual CFO?
The answer to this question entirely rests on the needs of your business.
If all you need is someone to manage your books, a skilled bookkeeper will most likely get the job done for you.
But, if you want your business to improve its processes, to gain a competitive advantage and thrive in your market, a Virtual CFO can help you to meet your goals.
Medium to large businesses typically have an internal financial team or CFO on staff. As a small business, you too get the advantage of having a highly experienced, fully qualified finance professional working for you without the commitment and cost of a full-time CFO, giving you an edge and allowing you to run your business knowing your finances are in good hands.
Virtual CFO services can be customised to meet your business needs – whether it is once a month or a few days every week.
Find out more about Distinct Business Solutions’ Virtual CFO services
Any advice in this blog is general in nature and is intended for information purposes only. For personalised advice please contact your accountant.