Many people often cannot distinguish the difference between a CFO and an Accountant. An accountant deals with the company's past books, while a CFO deals with the company's future. Furthermore, so many differences exist between a CFO and an Accountant.
Both CFO's and accountants are critical in an organization's financials. Despite their significance, they each have different roles. In the financial industry, accountants are responsible for dealing with past reporting results, balancing books, and filing taxes. CFOs are charged with the responsibility to take care of future goals, forecasts, and strategies. Additionally, there are several other differences. These are:
Primary differences between an accountant and a CFO
1. CFOs are in charge of executing financial strategies
One of the differences between a CFO and an accountant is that accountants provide tax advice and organize already existing numbers. Their primary responsibility is offering advice on methods to use to record all information collected. Their main forte does not involve undertaking financial strategies like the CFO. A CFO ensures that insight, strategy, and execution of financial strategy that accountants are not qualified to do are done well.
On most occasions, CFOs have broad experience in corporate finance, industry, and operations. Furthermore, their key focus is on future cash flow and long-term planning. Long-term planning ensures that every part of a company performs well enough.
Furthermore, companies usually outsource the CFO accounting services when they need; forecasting, financial risk assessment, long-term planning, acceleration of financial strategy, establishing policies, increasing profits, and controlling cash flows.
2. Tax strategy management by accountants
Unlike in CFO, where companies outsource CFO accounting services, accountants are usually employees of a company. Furthermore, accountants benefit the company they work for by having vast knowledge of tax compliance and law. Traditionally, the work of an accountant involves auditing, inspecting, and keeping accurate financial records. CFOs do not engage in the company's tax measures.
The accountants assist organizations in reducing their tax burden. They also ensure that they have stored all records well just in case a company audit takes place. Accountant's critical responsibilities include; filing and preparing taxes, managing tax audits, accurate financial records, reducing the company's tax burdens, and ensuring the company is tax compliant.
3. CFOs focus on long-term strategy while Accountants focus on tax strategy
A CFO is the most likely person to get a deeper understanding of a company's existing strategy and goals. Furthermore, their key focus is establishing company areas that require improvements, then device ways to ensure business growth and profitability. Finally, a CFO's most crucial instrument is long-term forecasting. The forecasting process helps companies in determining sources of funds and when or whether to spend.
4. Accountants focus on the past while CFOs on the future
The company's CEO must find a good balance between past records and future planning. Accountants take care of past records, such as filing taxes, balancing books, and reporting results. On the other hand, CFOs are responsible for looking out for future ways to achieve business objectives.
Despite their differences, both accountants and CFOs play a crucial role in business growth. Furthermore, there are no competing interests between them. They both work well and complement each other, so it doesn’t hurt to hire both.
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