Forums: Discussions for entrepreneurs and small business.

Neil,

I didn’t take it as CPA bashing either. More like discovering and sharing with the readers the differences between what a CPA and a CFO can do, as well as what they should do given their focus and experience. I’ve seen that many CPAs can do some of what a CFO does, and many CFOs can do some of what CPAs can.

As a CFO and not a CPA, the IRS laws are not something I focus a lot of time on, and I help my clients engage good people like you that have your outstanding tax experience to maintain expertise in that important business area. Not many can do all of what a CPA needs to do and all of what a CFO can do. I find most CPAs don`t have CFO experience and do not wish to provide those type services. Hats off to those that can and do.

In my experience companies are more successful when they have excellent trusted advisor relationships with both a competent CPA/Tax Advisor/EA AND a seasoned senior executive level CFO. That’s my whole point. I apologize for being less clear than I could have in my previous post. 

When I start working with a new client that does not have a good relationship with their CPA, or has not seen them or heard from them for a long time, or just takes files every quarter without engaging the client in tax-centric business decisions, I introduce them to a new CPA that will be proactive in their strategic involvement with the company. The smart companies that use both a competent CPA and CFO have proven time and again to have much better results. 

Hmmm…. Which brings up something else: Is there a downside to having your CPA doing your CFO work? I would imagine that though the disciplines are initially similar, the added background that a CPA possesses would skew, perhaps make more complex, the thought process and solutions involved in true CFO type work.

 

There’s also the potentially sticky matter of having all your eggs in one basket in case you have to terminate someone. Having the CFO and CPA totally independent of each other allows for an easy transition in case you have to give someone the boot. Or your CPA isn’t working out in a CFO role. You don’t want to sour the original relationship. Also, the subtle dynamics of an independent CFO thinking of themselves as working for you as opposed to a CPA/CFO working for the firm. Hmmm….

Jim, you absolutely want two different people doing CPA work and CFO work and you bring up good points. Here are some more: They are wired differently and solve different problems. A good CFO will have a similar relationship with you like you have with your CPA and attorney trusted advisors. CPAs have  an ethical obligation to stay at arms-length and not be materially involved in the day to day operations of a business (think Enron and Arthur Anderson). Do you want the same person doing your taxes and audits that makes strategic financial decisions, investments, and business operational improvements? That spells conflict of interest in my book.