Financial Roles for Small Businesses: Bookkeeper, CPA, and Fractional CFO

I am a fractional CFO specializing in serving law firms. If you’ve found your way to my page and are wondering about the term “fractional CFO,” you’re not alone. Even my husband had to resort to a Google search to explain it to someone. Today, I’m here to shed light on the distinctions between a fractional CFO, a bookkeeper, and a CPA, and help you understand which one might be right for your small business or law firm.

The Basics: The Bookkeeper

• A bookkeeper lays the foundation for your financial management.
• They set up your accounting software, ensuring your chart of accounts is correctly configured.
• Monthly or weekly, they categorize income and expenses, manage invoices, handle accounts receivable, and assist with payroll.
• Bookkeepers maintain and organize your financial records, making them accessible for future use.

The Essential: The CPA

• A CPA (Certified Public Accountant) focuses on the tax aspect of your business.
• They navigate complex IRS rules, maximizing tax deductions to benefit your business.
• CPAs handle tax filings, guide you on quarterly tax payments, and provide insights on your business structure (e.g., single-member LLC, S-Corp).
• With expertise in tax planning, CPAs are invaluable for ensuring compliance and optimizing your financial strategy.

The Forward-Thinking Strategist: Fractional CFO

• A fractional CFO looks beyond the past and focuses on your business’s future.
• Unlike bookkeepers and CPAs who analyze historical data, a fractional CFO forecasts and plans for upcoming financial scenarios.
• Monthly meetings involve discussions on budgets, cash flow forecasts, and aligning financial strategies with your business goals.
• Fractional CFOs offer strategic financial guidance on growth, helping you make informed decisions to achieve long-term success.

In summary, bookkeepers, CPAs, and fractional CFOs each plays a crucial role in managing your business’s financial health. Bookkeepers and CPAs excel at handling past transactions and ensuring compliance, while fractional CFOs take a forward-thinking approach, aligning your financial strategies with future goals. If you’re ready to leverage your financial data to drive your business forward and achieve significant milestones, it might be the right time to engage with a fractional CFO. They can provide the strategic financial insights needed to navigate the complexities of growth and guide your firm toward success.