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The CFO vs. the CPA

Updated: Mar 12, 2023

In all businesses, financial professionals are almost always necessary. You will often hear about these experts in various designations, sometimes interchangeably.

Among those widely recognized are the Chief Financial Officers (CFOs) and Certified Public Accountant (CPAs). At first glance, they seem to be both highly proficient professionals cut from the same cloth at first glance. But these go-to financial wizards are more different than you think.

Think of the medical practice, where the professional who diagnoses a patient is not the same professional who monitors and tracks patient records. The same contrasts can be said about a business, much more so in keeping the pulse of overall business health!

In this article, we discuss what you can expect from a CFO and a CPA, given their different competencies and areas of expertise.

A CPA looks into the past, while a CFO looks into the future.

A CPA is principally trained to oversee all business transactions and make sure they are soundly reported. CPAs manage that systems are in place so that this reporting process is accurate and efficient. CPAs are more concerned with past events affecting a business and that no transaction is unreported. Likewise, recording transactions that have not yet occurred violates sound accounting principles.

Meanwhile, a CFO utilizes these same reports of the CPA for effective decision-making. Using historical data, a CFO helps design strategies to ensure a business will thrive as it moves forward into the future. Most importantly, CFOs look into all the possible ways business goals can be met if not exceeded.

A CPA creates financial statements, while a CFO devises financial forecasts.

A complete set of financial statements are more in the domain of CPAs. Whether in the capacity of an in-house accountant or as an external auditor, CPAs are equipped to ensure that financial statements are prepared in good form. These documents give accurate pictures of an entity’s financial position and performance.

Financial forecasts, on the other hand, are a CFO’s specialty. If accounting principles guide financial statements, financial forecasts are shaped by deep knowledge and understanding of internal and external factors - including industry updates, market movements, and economic implications. These forecasts show where a business will go and how a CFO will help it prepare for that future.

A CPA prepares tax returns, while a CFO designs overall strategies.

CPAs are the go-to professionals for computing a business’s tax liabilities and preparing the accompanying tax returns. CPAs are proficient in tax compliance, helping companies comply with relevant tax laws. This knowledge is handy for anticipating tax payments and planning so that they can be mitigated or reduced.

CFOs, on the other hand, will not just help a business construct tax strategies but also effectively design an overall business strategy from a well-round approach. CFOs will look even further for optimal performance and growth. These professionals are equipped with the experience and the knowledge to see business operations not just from a financial approach - but also in marketing, production, and human resource.

Whether you need a CPA or a CFO depends on your business needs. You will need both in certain situations and in different capacities. Nevertheless, you need to distinguish which financial expert can address your specific concerns. This hairline distinction maybe your need for business growth and survival.

Fortunately, CFO services are within your reach. Alpha Pro Business Solutions offers fractional CFO services tailored to various business needs. Please send us a message today.

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