Difference between a tax agent and a financial controller/CFO

Most small/medium businesses will have a tax agent or external accountant but many do not see the need to hire or retain a Financial Controller/Chief Financial Officer. In fact many do not understand the different roles.

Generally speaking a tax agent is visited only a few times a year and their primary function is to prepare or review accounts in order to lodge appropriate tax returns. Any business advice they can give is limited by the lack of a close operating relationship and knowledge about your business. Additionally they are dealing with historical records so there is no room to improve on what has already occurred.

A Financial Controller/CFO, on the other hand usually looks at 4 different areas of your business:

1. Accounting - ensures that accurate information is available for reporting analysis and statutory compliance. Often working with the tax agent in this area to set up and maintain your accounting system, conduct company secretarial matters, as well as managing and advising book keepers or accounting staff.
2. Financial - ensures visibility of current financial position through financial statements and analysis, management reporting, job costing, budgeting, cash flow forecasting and an annual audit.
3. Operational - aims to achieve best practice through lean and efficient operations that support growth or expansion. This is achieved by setting internal controls, establishing systems and processes, writing standard operating procedures, depicting job functions and responsibilities, conducting contractual audits.
4. Strategic - aims to maximise your business value through business planning, identifying and setting financial strategies and policies, risk assessment and management, implementing performance measures and benchmarking.

All successful businesses look forward not backward, yes we have to learn from past mistakes but improvement is only available in the future and the best way to achieve continual learning and improvement is to surround yourself with the appropriate talent. Investing in the right Financial Controller/CFO will pay dividends as they will get the financial and operational fundamentals right for growth.