It’s common for business owners to lament that they never signed up to be their own bookkeeper, tax planner, IRS negotiator, or overall number cruncher. Add on retirement testing, inflation-based cashflow forecasting, state apportionment, sales tax nexus…and things get really fun. Goodbye weekends.
Pre-COVID, when clients looked to outsource their accounting needs, the dialogue was fairly straight-forward. “I need my annual taxes prepared, bookkeeping services, and payroll for the owners and employees.” Advisory functions seemed to be more of an “inconvenience” or a “luxury” rather than a requirement. “I don’t need cash flow forecasting; I know how much money I have in the bank.” “I have no need for employee benefits. My employees are happy as they are.”
My all-time favorite, “I will just buy a house in Florida, file homestead, sell my products across the United States. Florida has no State Income Tax, right?”
Post-COVID (if there is such a thing), between PPP loans, SBA EIDL grants, increasing inflation, state taxation based on economic nexus, and above-average employment costs, the one-time inconvenience of advisory services has become the new normal, maybe even a necessity. That’s where the confusion comes in.
I know I need help, I just don’t know what kind.
Clients are asking themselves whether they need an Accountant, or a CFO? “No wait, I think we need a Controller and a CPA. What about a Financial Advisor?” Recent buzzwords have clients’ heads spinning such as Fractional CFO, Virtual CFO (vCFO), Interim-Controller, Client Advisory Services (CAS), CFO Consulting Services, and so on and so forth.
So what’s the difference?
Simply stated, the services offered.
With no real standardized services across CPA and accounting services, what one firm may call CFO Services, another may term advisory. What one firm may refer to as transactional functions, another may call ancillary accounting. Although there is some overlap across the everyday accounting services, advisory encompasses a variety of skills, services, and customized financial advice.
So how is a business to decide what level of accounting services they need?
Great question. I’m addressing this in the next installment, “What Kind of Financial Consultant I Need for My Business?” READ NOW