The CFO and accountant each play critical roles in maintaining an organization’s financial health, but they also eachserve a unique purpose. As a leadership executive, the CFO takes a big-picture view to steer the company toward financial success. Meanwhile, the accountant handles day-to-day reconciliation of financial transactions.
Rather than competing, accounting and CFO services tend to complement each other. They may have some overlap, but generally, there is no redundancy between the roles. Interestingly, the career paths to becoming a CFO versus and accountant differ quite a bit.
Directing the Financial Train
A chief difference between a CFO and an accountant is the direction each role faces. As the financial leader, the CFO charts the organization’s course toward a successful financial future. The accountant handles the recording and reconciliation of transactions.
To use a train analogy, the CFO acts as the engineer upfront while the accountant serves as a supporting rear conductor to guarantee financial activities adhere to standards. Taking this analogy further, the CFO is the financial engineer as master of the balance sheet. The accountant, on the other hand, ensures the day-to-day financial activities of the back office are completed accurately.
Responsibilities and Services of CFOs
No matter the size or structure of a business, the CFO plays a high-profile leadership role. Responsibilities include overseeing finances, managing and mitigating financial risks and creating value wherever possible.
Over the years, CFO influence has expanded such that they are also sometimes a member of the company’s board of directors. Regardless, CFO services ensure alignment between executive and board goals. As a top advisor to the CEO, the CFO weighs in on investments, divestments and strategy.
Successful CFOs also take a proactive approach to get ahead of issues before they become problems. As strong communicators, they often lead key discussions with stakeholders, including investors and analysts on earnings calls. They also establish financial transparency by providing insights on key issues such as regulatory compliance.
Responsibilities and Services of Accountants
White the CFO takes the high-level view, accountants generally operate in the weeds of the record books and financial statements. They often report to the CFO, and they typically handle budgeting, tax preparation, payroll, the readying and auditing of financial statements, and cost analysis, among other tasks.
Differing Career Paths
The accountant role is not usually a stepping stone to CFO. Each follows a separate path, with CFOs often holding MBAs or business degrees while accountant qualification requires only a bachelor’s degree and license.
A shared foundation lies in command of balance sheets, income statements, cash flows and earnings. But the roles diverge from there to fill complementary needs.