An accounting department of any business needs to be neatly tucked in and presented as a clean slate. Any business with a fine accounting department prospers because of the clarity in the financial statements. Having clean finances could serve many purposes for business owners and could have many advantages. Still, the most important is that it gives the business owner an unobstructed vision for the future.
Different individuals could accept working in the accounts department, but each department has differing positions. The employee’s duties separate these positions once they join your company. A competent accountant must be able to analyze your financial statement, clear out all your credit by the time the accounting cycle concludes, and calculate profit, loss, and net income.
Understanding these positions and hiring the right person for your business can be challenging. We have broken down each class to help you know them better and make sound decisions.
CFO (Chief Financial Officer)
A CFO is placed on a high pedestal within the accounting department. They are the authority constantly in talks with the business owners as they report the financial findings to them. They oversee all the stakeholders and how they may be affected by the different decisions taken within the department. The chief financial officer combines past data with future statistics to come to plausible conclusions so that you can make appropriate decisions. Preparing reports and strategies for risk management are also included in the job of a CFO.
A CFO has several bookkeepers, controllers, accountants, and clerks reporting back to them to know everything related to the business. They are also in charge of creating new policies for the organization that would affect the company’s finances.
Only an extensive business should need a CFO because of the lack of financial affairs to manage in small businesses.
Bookkeeper
A bookkeeper deals with the numbers that are presented to them. A bookkeeper manages all the financial records of the business. This would include all purchases, due payments, loans, profit, losses, and income.
A competent bookkeeper must cater to the needs of the business by tending to the journals and ledgers that carry all the financial data. Without the help of a bookkeeper, bookkeeping may not be appropriately done by the business owner, which could affect the quality of the business.
A business owner should start looking for a bookkeeper when they enter the business world. A bookkeeper is necessary for even small companies because, unlike a CFO, a bookkeeper must tackle all major and minor financial data of a business that is just as much part of a small business as a large corporation.
Controller
A controller plays the role of a middle person. This happens because clerks and bookkeepers report directly to them while they must write all their findings to a CFO.
The role of a controller is to supervise all the work of an accounting department. They could also play the role of a financial manager in an organization. They focus on helping a CFO create strategic game plans to increase the organization’s cash inflow.
Who to Hire?
This question often confuses a lot of business owners. While starting a business, they are often unaware of the hierarchy of the accounting department. This includes the positions they should be offered according to their company.
Before deciding, you should first assess the size of your business. The length of your business determines the financial data you would have to cater to once the company is up and running. Ensure that you make a thorough analysis to see how much your business can be affected by hiring the right person for it.
If your business is extensive and deals with a giant corporation, you should acquire a CFO and the rest of the subordinates. But a bookkeeper would be enough if your company is limited and has a narrow approach to the market.
Conclusion
In summary, the significance of a well-organized accounting department cannot be overstated in any business setting. A meticulously managed accounting department ensures clarity in financial statements, paving the way for business prosperity and informed decision-making. Understanding the distinct roles within the accounting hierarchy—such as CFOs, bookkeepers, and controllers—is crucial for hiring the right individuals to manage the company’s financial affairs effectively.
While CFOs oversee financial strategies and report directly to business owners, bookkeepers meticulously manage financial records, and controllers serve as intermediaries, supervising accounting operations. Making informed hiring decisions based on the business’s size and complexity ensures optimal resource utilization and positions the company for financial success. Whether it’s a large corporation or a small business, having the right personnel in the accounting department is critical to maintaining financial health and achieving long-term growth.
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