Everyone says you need a good bookkeeper for your business. You went out and hired one, and now you have financial information to look at, but you still don’t understand your business finances. You need help understanding what the numbers mean, creating a financial plan to achieve your business goals, and understanding the tax implications of growth – all of which your bookkeeper says they can’t help you with.
At some point, many business owners begin asking the same question:
How do I find an accountant who can do it all?
One of the most common misconceptions among business owners is that every accounting professional provides the same services. It's easy to assume that if you hire a bookkeeper, they'll also provide financial advice and help you with budgeting, or that if you engage with a tax accountant, they’ll also help you keep your books up to date, accurate, and CRA audit ready. However, there are many different accounting roles that your business may need over its lifecycle, and they all help to solve different problems. Bookkeepers, controllers, and CFOs all play different roles in your business, and understanding those differences can help you figure out what kind of support you need.
Good Decisions Start with Good Bookkeeping
Good accounting data is the foundation that a financially healthy company is built on.
A bookkeeper is responsible for recording and organizing your business’ day-to-day financial transactions. They help ensure transactions are entered into your accounting system correctly, your bank & credit card accounts are up to date and reconciled, invoices are processed, and payroll & accounts payable are kept up to date.
Typical bookkeeping responsibilities include:
- Recording financial transactions
- Processing accounts payable and receivable
- Payroll processing
- Sales tax tracking and filings
To understand financial health, make informed business decisions, and even get good tax planning advice from your tax accountant, you need to have timely & accurate bookkeeping.
Proper bookkeeping also helps ensure you meet important obligations, such as paying suppliers on time, making payroll remittances to CRA, and maintaining organized records for tax filing & year-end reporting.
When should you hire a bookkeeper?
If you're spending more time organizing receipts, reconciling bank accounts, or managing invoices than running your business, it's probably time for bookkeeping support. A bookkeeper helps keep your financial records accurate and up to date, giving you a reliable foundation for future decision-making.
Controllers Help You Understand the Numbers
Once you are getting timely financial data from a bookkeeper, the next step is to ensure that the data is accurate, and that you understand what those numbers mean for your business. This is where a controller adds value.
Rather than entering transactions into your accounting software, a controller reviews your financial information for accuracy, identifies trends & patterns, implements or improves efficient internal processes, and helps ensure your financial reporting is accurate and reliable.
Controllers often oversee:
- Month-end and year-end financial reporting
- Budgeting and forecasting
- Cash flow monitoring and internal controls
- Financial analysis and process improvements
A controller helps answer questions such as:
- Why are profits lower than expected given revenue has increased?
- Are expenses increasing faster than revenue?
- Are we turning increased revenue or profit into cash flow?
Instead of simply reporting what happened, a controller helps explain why it happened. They provide financial insight that helps business owners make more informed operational decisions.
Many business owners are unaware of this role that sits between a bookkeeper and a CFO. They can become frustrated when they hire or outsource a bookkeeper and then expect them to provide strategic financial advice or detailed financial health/performance analysis. It’s a bit like expecting a carpenter to design the building they’re working on. This should be done by an architect, with the carpenter focused on executing on the plans. Both are important roles, and buildings don’t get built without either, but they are responsible for very different tasks and bring very different skills to the project.
When should you consider a controller?
As your business grows, financial information becomes more complex. If you're asking questions about profitability, cash flow, budgets, or why your financial results aren't matching your expectations, controller-level support can help turn your financial data into meaningful insights.
A CFO Looks Ahead
A Chief Financial Officer (CFO) focuses on the future.
While bookkeepers maintain financial records and controllers ensure accuracy and analyze current performance, a CFO uses financial information to guide long term business decisions.
A CFO may assist with:
- Strategic and growth planning (such as acquiring new businesses, succession planning, and how to finance expansion projects)
- Risk management
- Cash flow forecasting and business acquisition
- Business valuations and investment decisions
A CFO helps business owners answer questions like:
- Can we afford to hire more employees?
- Is now the right time to expand into a new market?
- What will our cash flow look like six months from now if we undertake this project?
- What mix of services or products is the most profitable for our business?
When should you consider a CFO?
If you're planning to expand your business in a substantial way, hire additional staff or acquire new equipment, seek financing to fuel growth, purchase another business, or make other major investments, strategic financial guidance becomes increasingly valuable. A CFO helps ensure important decisions are supported by sound financial planning rather than guesswork.
A CFO uses what your financial results are telling you today to help you make better decisions about tomorrow.
Which One Does Your Business Need?
The answer depends on where your business is today. The table below is a nice summary of the different roles discussed above, and what they can help you with:
| Role | Main Responsibility | Questions They Answer | Pain Points They Solve |
|---|---|---|---|
| Bookkeeper | Maintaining accounting records | Are our books up to date? | I don't have financial data to make decisions. |
| Controller | Financial reporting & analysis | Why is our profit not turning into cash? | I don't understand what my financial data is telling me. |
| CFO | Financial strategy & planning | Can we afford our expansion plan? | I don't know how to use my financial data in long-term strategic planning. |
Small business owners almost always need a bookkeeper, as this is a task that can easily be delegated from the owner at an early stage in the business’ life. Controllers and CFOs are certainly valuable additions to any business, but most small businesses will never be in a position where they need either of these roles on a full-time basis. There is often benefit in having access to these roles on a fractional basis, as there are always periods in a business’ life cycle when the advice of a controller or CFO will help owners to avoid a lot of stress and financial strain.
These roles aren't replacements for one another; they build on and complement each other.
- A new or smaller business often starts with bookkeeping to establish accurate financial records.
- As operations become more complex, controller-level support helps owners better understand performance and improve financial processes.
- As the business continues to grow, the leadership of a CFO can help with long-term planning, major investments, and strategic decision-making.
Every business is different, and the right level of support depends on your specific goals, complexity, and stage of growth.
It is rare to find a small business that needs all three roles as a full-time position. Instead, they often benefit from working with a firm that can provide the appropriate level of support as their needs evolve.
It’s Not About the Title
It’s easy to assume that if your business is experiencing cash flow crunches or financial strain, then you need to bring in a CFO to help you fix the problems. However, in our experience, the answer is often to start with more reliable accounting data through the services of a bookkeeper and controller that will help you diagnose and correct problems internally. Business owners know their businesses better than anyone. A good fractional CFO brings financial expertise to complement that knowledge, but they can’t fix everything overnight. Others continue relying on bookkeeping alone when their business has reached a stage where financial analysis and strategic planning are becoming increasingly essential.
The goal isn’t to have the biggest finance team, or to spend all of your profit on fractional accounting providers; it’s to have the right level of financial support for your business.
Understanding where your business is today and where you want it to go can help determine which level of expertise will provide the greatest value.
Signs You’ve Outgrown Your Current Financial Support
It can be hard to realize when you’ve outgrown your current accounting support until challenges begin to surface. Some common signs include:
- You're making hiring or purchasing decisions based on how much is in your bank account.
- Your income statement shows a profit, but your bank balance isn’t increasing.
- Your team is busy with all the work you’re bringing in, but your profitability is getting worse.
- You don't know which customers, services, or projects are the most profitable.
- You're planning for growth but aren't sure whether your finances can support it.
Final Thoughts
Bookkeepers, controllers, and CFOs all play an important role in helping businesses succeed, but they solve different problems.
Bookkeepers keep your financial records up to date.
Controllers help you understand what your numbers mean.
CFOs help you make informed decisions about the future.
As your business grows, your financial needs will change. The goal isn't to hire the most senior accounting professional you can afford. It's to find the right support for the challenges you're facing today while preparing for what's next.
Not sure what your business needs right now?
Take our 2-minute Accounting Role Assessment to find out whether a bookkeeper, controller, or CFO is the right next step for your business.