Accounting: What kind of bean counter do you need?

Accountants are trained, certified and usually quite experienced in financial analysis, both creating and reviewing data.  Bookkeepers are often trained on the job although sometimes more formally and handle the physical work of accounting for the transactions.  To expect a bookkeeper to provide analytical planning is to ask for something they often cannot provide, except in a cursory way.

We need to repeat this distinction on occasion, because there is a considerable difference between the cost of a bookkeeper and an accountant.

Why bother with this? Many early stage founders and CEO’s believe they can delegate design and creation of metrics, flash reports, analytical reports and more from their bookkeepers.  And at some early stages, a bookkeeper can prepare such information.  It does not take long for a growing business and a knowledgeable CEO to quickly outgrow the lack of depth and sophistication such reporting usually offers, looking instead for deeper analytical tools.

On the other hand, many early stage CEO’s are not trained and ready for such tools even if available.  The lesson here is twofold.  There is a benefit to using a good accountant to help devise critical reports for a corporation; and CEO’s must quickly become financially savvy in the analysis of financial statements and metrics that measure the health of a business.  To fail to have this skill is to reduce the corporation’s capability to discover problems early and take advantage of growth opportunities.

Please feel free to comment on this post in the field below. -Dave

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2 Responses to Accounting: What kind of bean counter do you need?

  1. We just began working with a $7M business that has a bookkeeper with the title of controller, and the information they’re NOT getting is frightening. Even more frightening, they don’t know what they don’t know.

  2. It is understandable that entrepreneurs and business execs in general have historically had little interest in out of date, meaningless and mostly incomprehensible financial reports.
    The tragedy is that accounting people, processes and technology have not changed that. How and why now? New – cheap and cheerful – cloud-enabled processes and technology allows for the automation and delivery of affordable fractional bookkeeping, accounting, CFO and tax services that can benefit almost any growing business.
    By doing so they can outsource these non-core functions and benefit from meaningful financial and operational information that allows execs to work on the business not work in the business.

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