Fractional CFO vs bookkeeper vs CPA: who does what for a contractor

Oct 2

2 min read

A bookkeeper records and reconciles your transactions. A fractional CFO uses those numbers to help you plan cash, price jobs and make decisions. A CPA firm handles tax returns and, where licensed, audits, reviews and compilations that come with a formal report. Most growing contractors need all three roles, and they are not interchangeable.

The bookkeeper: accurate records, on time

Bookkeeping is the foundation: bank and credit card reconciliations, payables and receivables, coding costs to the right job, and a monthly close. Without it, nothing else works. A bookkeeper tells you what happened.

The fractional CFO: what the numbers mean

A fractional CFO works part-time at a senior level. For a contractor that usually means job costing and WIP, cash flow forecasting, profit by job or crew, and decision support when you are weighing a hire, a piece of equipment or a bigger contract. A fractional CFO tells you what is likely to happen and what to do about it.

The CPA: tax and attest work

Certified public accountants prepare tax returns and plan around tax law. Licensed CPA firms are also the only ones who can perform audits, reviews and compilations and issue a report on your financial statements. If a surety, lender or buyer asks for reviewed or audited statements, that work has to come from a licensed CPA firm.

Where the lines are for Edi & Sienna Group

We provide bookkeeping, accounting and fractional CFO services. We are not a licensed public accounting firm. We do not perform audits, reviews or compilations, we do not issue opinions or assurance on financial statements, and we do not prepare tax returns. The financial statements we prepare are management prepared and unaudited. What we do is make sure that when your CPA or your surety's accountant opens the file, it is clean, reconciled and organized around your jobs.

How the three work together

Monthly: the bookkeeping team closes the books.
Monthly: the fractional CFO reviews job profitability, WIP and cash with you.
Annually, or when required: your CPA prepares taxes and any reviewed or audited statements from those books.

If you want a second set of eyes on your own numbers, book a free 20 minute call with Julia at calendly.com/juliaspahiu.

Edi & Sienna Group provides bookkeeping, accounting and fractional CFO services. We are not a licensed public accounting firm and this post is general information, not tax, legal or accounting advice for your specific situation.