Should I Use The Same Company for CFO and Bookkeeping Services or Keep Them Separate?

Should I Use The Same Company for CFO and Bookkeeping Services or Keep Them Separate?

by Lucrum Staff

Is your company considering outsourcing fractional CFO and bookkeeping services to two different companies? Using a single provider for both might be the better option. While we might not recommend this in every single case, it’s always worth exploring.

Not only is it easier to manage one vendor, but having bookkeeping and strategic finance handled by the same team ensures better alignment between strategy and day-to-day accounting activities.

What are the benefits of using one provider for both fractional CFO and bookkeeping services?
  1. Streamlined Vendor Management: One message, one provider, one relationship. Having one provider saves the headache of having to manage and coordinate multiple vendors, reconcile possibly different approaches or viewpoints, and gives time back to refocus on financial strategy.

    This means not having to pull and provide reports and data to each professional separately and not needing to babysit the relationship in general. When one vendor is providing both services, it is important that they take responsibility in proactively sharing information and keeping open lines of communication between the CFO and bookkeeping resources that are part of the same organization. If they aren’t or the business owner is having to coordinate; it’s probably a good sign that an upgrade is due.

  2. Increased Confidence In The Numbers: When bookkeeping and fractional CFO services are managed under separate roofs, it’s possible that data may become fragmented. In some cases, this may be due to information physically being stored in separate places (eg. separate online folders or software systems), in others it may be due to communication breakdown around how the data is being entered, and thus how it is interpreted.

    One provider will be able to more easily achieve a holistic view of the business’s finances – because they are managing financial strategy and have a full understanding of the “taskmaster” type bookkeeping entries.

    Bad data entered into accounts by bookkeepers means resulting reports analyzed and interpreted by the fractional CFO resources will not be accurate. Or the CFO has to spend time correcting mistakes. Keeping these functions together reduces the risk of these types of errors due to simple misunderstandings between how data is entered and reported. This is because the fractional CFO has direct access to both the most up-to-date financial data from the bookkeeping team and direct access to ask that team questions or suggest corrections and offer training.

  3. Improved Communication: Yes, we touched on this in the first two points, but it’s enough of a benefit to stand on its own. Not only is communication simplified for the business itself by having only one vendor to contact, communication is also streamlined between CFO and bookkeeper – as they are sitting on the same team and often in the same physical office. It’s a simple question; if a CFO is at a different firm, is he/she more likely to invest the time to train and educate the bookkeeper than if that same bookkeeper worked with the CFO on multiple projects?

    Most firms that offer both CFO and Bookkeeping services will hold ongoing meetings with staff working on every component of the client engagement, ensuring that any problems are identified and resolved faster. With both services under one roof, communication between the financial strategists (fractional CFO) and the data processors (bookkeeping) becomes seamless. They can easily share information and updates, reducing the possibility of miscommunication or delays.

    At Lucrum, we have a weekly Friday Huddle every week at 9:30 to facilitate this exact interaction. Chances are one of our team members who is having an issue will be able to work with another team member to resolve it or at least jump the learning curve, saving time and getting the client a better answer from experience, not Chat GPT or Google.

  4. Better Alignment Between Strategy & Execution: A single provider fosters a more holistic approach to financial management. The fractional CFO can leverage the bookkeeping team’s understanding of daily transactions to create a comprehensive financial picture. This integrated view helps them make strategic decisions that consider both long-term goals and day-to-day operations. Both the fractional CFO and bookkeepers are working towards the same objectives set by the company, proactively working towards the business’s overall financial goals.

Is there ever a time when keeping bookkeeping and fractional CFO services with two separate outsourced providers is the better choice?

At the beginning of this article, we mentioned that we may not recommend one provider in every single case. There’s one key exception: An existing bookkeeper and business owner have excellent synergy and communication.

It is possible for two external providers to work well together. If a business is already using a fractional CFO and or part-time bookkeeper they are really happy with and it seems like the twoadding the CFO in is the next logical step for the business growth or to solve problems as a result of growth, take initiative to communicate on their own and work together, it may be best for the business to keep those two separate providers. After all, why break what’s working?

One warning; make sure to vet the new provider to ensure their advice is valid; do the same with the existing bookkeeper. We’ve seen times where a business owner thinks their bookkeeper is 10/10 but we wouldn’t give him/her a 5. Same with new CFO clients; we’ve heard horror stories from bookkeepers who tell us what the previous “CFO” instructed them to do or was focused on and it blows our mind.

Beware of using an existing service provider for both services if the other service isn’t already a part of their core offering.

Lastly, beware of using an existing service provider for both services if the other service isn’t already a part of their core offering.

The CFO skill set varies greatly from a bookkeeper’s. Let’s say an existing fractional CFO provider doesn’t have dedicated resources for bookkeeping services, and is really just geared towards engagements for strategic financial support. If asked if they can provide bookkeeping services too and they say “yes” just to expand the existing engagement and avoid another vendor in the picture, this could lead to unmet expectations and poor bookkeeping results.

As stressful as it may seem to consider changing vendors in the short term, if you’re already leaning towards consolidating both functions to one vendor – it may be in the business’s best interest long-term to find a firm that specializes in both.

We hope that these tips help you to create an ideal outsourced business finance strategy. Interested in a provider that specializes in a full breadth of both fractional CFO and bookkeeping services? Lucrum Consulting could be a great fit. Schedule a no-commitment consultation with one of our staff members today.

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