Bookkeeper, Accountant, CFO: What Each Role Does for Your Small Business
As a small business owner, you wear more hats than you can count—CEO, marketer, customer service rep, and sometimes even janitor. One of the most critical hats you'll wear, though, is financial manager. Whether you’re handling every dollar yourself or bringing in help, it’s important to understand who does what when it comes to managing your business’s finances.
You don’t have to do it all yourself. In fact, you shouldn’t. But before you outsource or hire, you need to understand the three key roles in the financial management hierarchy inside your company: Bookkeeper, Accountant, and CFO. Let’s break down each role so you can identify what your business needs now—and what it might need as you grow.
*Note that the list doesn’t include a tax professional. The focus of this article is internal financial management for your company—the daily, weekly, and monthly items. You absolutely need someone else outside of your organization to guide you with tax planning, assist with legal compliance, and prepare your taxes. This person should be a CPA or EA who preferably specializes in your size and type of business.
Level 1: The Bookkeeper
At the base level is your bookkeeper—the person responsible for tracking the day-to-day numbers. This includes entering transactions, managing invoices, paying bills, running payroll, and keeping your books clean and organized.
If you’re just starting out and not yet ready to hire, it’s fine to do this yourself. It can actually be a great way to get in tune with your numbers. But be warned: bookkeeping takes time and requires accuracy. Messy books mean bigger headaches later.
To do it yourself right, invest time in learning how bookkeeping works—or better yet, hire an accountant to help you set up your chart of accounts and bookkeeping system correctly from day one. Even a few hours of professional setup can save you hundreds—if not thousands—down the road.
As your business grows and the number of transactions increases, it’s time to pass this role off. You might hire a part-time bookkeeper, outsource to a bookkeeping firm, or train an admin assistant to take over. If your business is very small, you may only need a few hours of bookkeeping a month, making it a perfect task to outsource without breaking the bank.
Level 2: The Accountant
Next up is the accountant. This role may be titled differently—finance manager, etc. but the functionality of the role and knowledge needed is that of an accountant. Where the bookkeeper focuses on input, the accountant focuses on interpretation. They make sure your financial data is accurate, generate essential reports like your P&L (profit and loss), balance sheet, and cash flow statements, and help you make sense of the numbers.
Accountants also handle reconciliations, journal entries, and advise you on budgeting. Many business owners skip this step and only speak to an accountant at tax time, but that's a mistake. At tax time, your CPA or EA is focused on your tax filing. You should have someone with accountant-level knowledge involved throughout the year to help you stay proactive, not reactive.
You can outsource this role as well. Some accountants offer bookkeeping services, too—so if you’re not quite ready for two separate people, you might find a great fit in someone who can cover both levels for you.
Level 3: The CFO (Chief Financial Officer)
At the top of the financial management hierarchy of your company is the CFO. This is the strategic thinker—the person who looks at your financials and helps you plan the future of your business. They help set pricing, manage risk, assess growth opportunities, and guide financial strategy.
In many small businesses, you are the de facto CFO. And that’s fine—if you’re comfortable interpreting reports, managing budgets, forecasting, and making high-level financial decisions about finances. But if those things aren’t your strong suit, bringing in help here could be a game-changer.
A fractional CFO is a great solution for small businesses that don’t need (or can’t afford) a full-time CFO. These professionals work part-time or on contract to provide expert financial strategy. They can help you improve cash flow, analyze financial risks, optimize operations, and give you peace of mind that you’re making the right decisions.
Is a separate person required for all three levels?
Not necessarily. You might start by doing your own bookkeeping, then outsource to an accountant who handles both Level 1 and Level 2 tasks. Later, you might bring in a fractional CFO for strategic guidance as you scale. Or you could train an admin assistant to handle the bookkeeping tasks of Level 1. Then outsource to someone with accounting and CFO skills for both Levels 2 and 3.
Some professionals can handle multiple levels—but remember, you’ll pay CFO rates for CFO-level talent. That said, paying more for the right expertise can often save you money (and stress) in the long run.
Ownership Still Falls on You
Even if you outsource all your financial management roles, you are still responsible for the financial health of your business. Your accountant or CFO can only work with the information you give them—so make sure you’re organized and timely with sharing records, bank statements, and other critical data.
Also, when it comes to hiring or outsources, be specific. If you need someone to interpret financials and guide strategy, don’t post a job ad for a bookkeeper. And don’t confuse tax pros (like CPAs or EAs) with in-house financial roles—they’re part of your team too, just in a different capacity.
Running a business means staying on top of your finances, even if you’re not the one doing the data entry. Understanding the financial management hierarchy—Bookkeeper, Accountant, CFO—helps you fill the right roles at the right time.
So ask yourself: Am I doing the financial work I should be doing? Or am I holding my business back by trying to do it all?
Let go of what you can, hire or outsource what you must, and stay focused on what only you can do: lead and grow your business.
Looking for expert guidance on building a strong financial foundation for your small business? Get your copy of Navigating Your Small Business Finances today and take control of your business's financial future with confidence!
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