When do I need an accountant for my professional services business?

“When do I need an accountant for my professional services business?” This is one of the most commonly asked questions I get.

Deciding whether to outsource accounting, hire a CFO, or bring an accountant on board is a pivotal question many business owners face. The right choice can streamline your financial operations, ensuring you're not just surviving but thriving. Let's dive into the distinct roles of bookkeepers, CPAs/EAs, and CFOs which will help you decide when each is needed.

• BookkeeperThis is usually a data-entry level role. It varies but in general they assign activity of the business to various chart of accounts (ie: office supplies, marketing, revenue etc). They might assist in creating invoices and bills, help on collections and a few other filing tasks - but in general they are looking at past activity and organizing what’s already happened for the most minimum of record-keeping purposes.

• CPA/EA (in United States)CPA (Certified Public Accountant) or an EA (Enrolled Agent) are both well versed in tax law that’s acceptable by the IRS.  That is their only lane. They do not deal with the day to day of the business, unless it relates to something the business needs to comply with (called Compliance in finance).  They prepare and file tax forms.  Sometimes they might have expertise around that, forming entities, etc. but it varies.  This is a point of contact that you meet with 1-3 times a year only.

• CFO/Chief Financial Officer - this is usually a C suite person in a business (or in our case, fractional and outsourced).  They do a few things: bridge the gap between the CPA-speak to the owner and bookkeeper, translating the needs across the board. They also look to the future, based on accuracy from the past: forecasting, budgeting, advising - keeping an eye on the business to keep it profitable.

Verte Consulting takes it a step further, we are a “cloud CFO” business meaning we also coordinate and organize the software stack around the business needs, and around the accounting software (we proudly focus on Xero for our on-going clients).

I have been a CFO since 2005 (!) and in 2013 realized the need for the technology aspect. When done well, it significantly reduces admin time, errors, and delays for analyzation. It is THE foundation of a business and cannot be overlooked if you want to run your business by the actual numbers.

When did you realize that software was actually  key to financial success?