the profit center is now purpose capital
“So, are you a CPA?” or “Can you help me with my taxes?”…these are questions I get often. And the answer to both is, no. I respect the heck out of accountants, but they offer a very different, but equally, important set of skill sets than I do as a finance expert. As you are looking for financial support for your business, it is important to understand the distinction between the services offered from a finance expert vs an accountant.
So what are the main differences between these two functions?
Accounting focuses more on the day-to-day flow of money in and out of the business, reconciling historical financial data and compliance. They look at transactional level detail and ensure accuracy of your financial records. An accountant or CPA will also assist you will completing your taxes and monitor your activity for compliance with all applicable accounting rules and regulations. For the most part, they are really focused on what has already happened in your business.
Finance is much more forward-looking and focuses on the strategic management of your assets and liabilities. They are helping you understand where you want to take the business and developing a financial roadmap of how to get there. Launching a new product? Your finance partner will help make sure you are priced appropriately and have a sustainable cost structure. Want to make an acquisition or invest in some other asset? Your finance partner can help assess affordability and forecast out the impact of that investment. Finance will typically work at a much higher level than accounting, focusing on the go-forward strategy.
Both finance and accounting professionals provide a unique view of your business’ finances. This is why in many large companies you will have both a Chief Accountant or controller and a CFO. While they will work together, they are focused on two different aspects of the business. In building a financially healthy organization, you really should have both.