CPA and CFO are probably the two most frequently used acronyms when it comes to corporate specialists in the financial field. The acronym CPA stands for Certified Public Accountant, while CFO stands for Chief Financial Officer – while both roles are essential in the life of any company, they are different in many ways. Here are some of those important differences.
The Most Important Tasks
While the tasks of CFO’s usually consist of forecasting, planning and developing short-term and long-term financial strategies, the work of CPA’s involves activities that focus on the calculation of the company’s taxes and on the preparation of their tax returns. While it is the CFO’s task to handle budgeting and cash-flow issues and to raise capital for the operations of the company, it is the CPA’s task to minimize the amount that the company has to pay in taxes and to make sure that the financial records are always at hand in case an audit comes.
The Cost of Services
Companies can either choose to employ their own CFO and CPA or they can turn to accounting companies that will provide the required financial services. From the point of view of the costs of the two service categories, CFO’s are the most expensive, CPA’s being slightly less costly, but costlier than bookkeeping or accountancy services. The difference in costs reflects the difference in profile between the two types of financial experts – while CFO’s usually have long experience in company finances as well as a track record of having driven companies to success, CPA’s rarely have that kind of experience.
Aspects Related to Collaboration
CFO Services Highlands Ranch providers are responsible for developing financial strategies and strategies of growth. In addition, they are responsible for the management of financial projects and for assessing financial risks. CPA’s are responsible for ensuring that the company’s finances are in compliance with applicable laws and that the tax burden that the company has to deal with is kept to the minimum. It is not very difficult to see why the two types of specialists usually work together closely. CFO’s very often rely on the figures and calculations received from CPA’s to develop their strategies – without a CPA doing an excellent job, the CFO would have a much harder time.
Should You Hire a CFO or a CPA?
CPA’s are surely more affordable, their tasks and activities also being closer to what laymen know about corporate finances. CFO’s, on the other hand, are high-profile employees who have a strategic approach and a vision for the company. Due to these differences in terms of approach, most smaller companies say that they cannot afford a CFO and the volume of their transactions does not justify hiring such an expensive employee, so they usually opt for hiring a CPA. However, today both CFO’s and CPA services are available from specialized companies, allowing businesses to outsource the tasks that would be otherwise handled by a CFO or a CPA, so even the smallest business at the beginning of the road can afford to have access to the services of experienced, knowledgeable CFO’s and CPA’s.