When To Hire A Virtual CFO Instead Of A Bookkeeper

Virtual CFO ~ what do they do? What do the other Financial Staff do?

As your business grows you, you may find yourself outgrowing your bookkeeper. There are some great bookkeepers out there, that are highly skilled and quick, up-to-date with technology. And some can even help you with more advanced accounting work like budgeting, or helping you predict future cashflows, or plan for major purchases. But what about a Virtual CFO….?

You may or may not have thought hiring a Virtual Chief Financial Officer (aka Virtual CFO or VCFO).  Many business owners still don't really know the difference between an accountant, a bookkeeper and a financial controller.

And then there's Tax Agents and BAS agents, and it all just gets a bit overwhelming right about now. Also, different people may hold different definitions of each one too, just to make it a little bit more interesting.

Bookkeeper

Is responsible for data entry, recording transactions and organising your paperwork. A bookkeeper needs to work under the supervision of a BAS Agent or a Tax Agent in order to be allowed to do any work related to your BAS, including coding GST or recording payroll. The exception is if the bookkeeper is your direct employee, and then they can do all of the above, but it's a good idea that your accountant oversees the quality of their work.

Registered BAS Agent

Is responsible for the same tasks as a bookkeeper except they can do the BAS related work, supervise junior bookkeepers, lodge BAS Statements and other GST related tasks.

A BAS Agent is an ATO Approved bookkeeper who is registered with the Tax Practitioners' Board. A BAS Agent has met the minimum requirements of a Cert IV in Bookkeeping/Financial Services, 1,400 supervised hours lodging BAS in a 4 year period, ongoing professional development to stay registered, and professional indemnity insurance.

But just because someone is registered doesn't guarantee they will be good at what they do, but with a BAS Agent you're protected by Safe Harbour laws and the Tax Practitioners' Board code of conduct.

Accountant

An accountant can work inside a company, like a senior bookkeeper or they can work for an accounting firm (or public practice). In a company they may do bookkeeping work, but it's more likely that they supervise the bookkeeper or junior accounting staff. In a public practice the accountant may do similar but usually across many different clients, rather than just working for one company.

Registered Tax Agent

A Tax Agent is similar to a BAS Agent, but instead of specialising only in the GST laws, they are also covered for taxation laws, and can prepare and lodge Tax Returns. Usually a tax agent works in an accounting practice, preparing tax returns for individuals and companies. And sometimes an accountant or bookkeeper working within a small business may also be a Tax Agent. As the BAS Agent meets standards to get registered, so does a Tax Agent.

Virtual CFO

Many people these days call themselves a Virtual CFO, VCFO or Virtual Chief Financial Officers, but many that call themselves would really be Virtual Accountants or Virtual Financial Controllers.

A CFO is part of the C-Suite, ie the CEO, CFO, CMO, CTO, CXO and all the roles starting with the letter “C”. It's very fashionable for small business owners to call themselves CEOs. Or CEO and Founder, but normally a CEO is someone who has stepped in to take over the founders role when the company is growing.

In reality a CFO works for an ASX listed public company, or a large corporation. So technically Virtual CFO isn't the right term. But hey! It sounds cool so we call ourselves CFOs and CEOs!

Financial Controller

A financial controller is the same as a CFO, except for a small business. This is the real term that most Virtual CFOs would be referring to. A financial controller is basically an accountant; a senior accountant who reports directly to the business owner or company director. This person is responsible for assisting the business owner to roll out their financial plans. What that looks like in practice is, the business owner has a vision. And in order to achieve that vision they will need to rely on other highly-skilled individuals who can advise them, and then help design and implement their plans.

A business owner would rely on advisors in the area of marketing, production, finances or accounting, legal, technology and sales. When a business gets to a certain size they are going to need someone who is more involved in their business than their external accountant/tax agent. But they would needs a higher level of advice and support than what they can get from their bookkeeper/BAS agent.

The financial controller would be responsible for all of the bookkeeping, BAS, payroll and taxation, although it's unlikely they would do any of that work themselves. Normally they would have a bookkeeper working under them, if that was financially viable for the business.

The financial controller would be responsible for ensuring that good accounting and financial record keeping systems are in place, and that the accounts are accurate for decision-making by the owners. They would be responsible for reporting to the business owner on various aspects of the financial or management accounts.

Financial accounts include the profit and loss and balance sheet. The management accounts include sales reports, or production reports. A financial controller would manage the company asset registers too.

And a financial controller would oversee the whole finances of the business on a regular basis and be on the lookout for how they can increase profitability and cashflow of the business. This could be done by watching closely for opportunities to reduce costs, or increase income.

Have you outgrown your bookkeeper or external accountant for this level of support?
Do you need a Virtual CFO?

What we do at Off The Hook Bookkeeping, is combine the Virtual CFO role with the bookkeeper/BAS agent role. We step in as you are growing and have outgrown only working with your bookkeeper and your external accountant once per year.

We step in and give you that extra level of support, and we can provide you with a bookkeeper, or work alongside your bookkeeper.

Our goal is to help you transition into being able to have your own internal financial controller, or bookkeeper.

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Amy is also the founder of The Savvy Bookkeeper ~ so if you are a Bookkeeper who needs help increasing you Profit, Freedom and Joy in your business, please get in touch.

If you are interested in engaging with our Bookkeeping services ~ please click here to get in contact.