What Are the Levels of Accounting Skills Available?

Recordkeeping Services

Almost all businesses start out with a recordkeeping function which is done part-time by anyone available or outsourced to a vendor. The minimum is done to get the tax compliance handled.

Bookkeeping Services

In very small businesses (revenue under $500,000 per year), a bookkeeper codes the transactions, reconciles the bank accounts, and generates monthly reports. The bookkeeper can be a part-time or full-time employee, a contractor, or a bookkeeping business that provides this service. Invoicing is usually done by someone in the office, in the field, in the store, or online via an automated shopping cart.

Bookkeeping + Light Advisory Services

For small businesses generating roughly over $500,000 per year in revenue, bookkeeping work plus some advisory work is, well, advised ?. An accounting professional needs to make sure the books are “done right.” The business owner may need help with cash flow, accounting software questions, setup, cleanup, adjusting entries, payroll compliance, or workflow efficiencies. An experienced bookkeeper or senior accountant is right for this level of service. This is the first level of accounting service where you may see a return on your investment in accounting services due to accounting process improvements and training efficiencies.

Controller Services

A small business earning more than $1 million in annual revenues is ready for controller-level services. This includes bookkeeping which is either outsourced or done in-house by full-time or part-time employees or contractors. An oversight function is included where an accounting manager reviews the monthly work and discusses financial reports with the owner.

In addition, some advisory services may be included:

• Budgeting and forecasting
• Cash flow projections
• Loan package creation
• Insights into where you can reduce expenses, increase revenues, decrease risk, and/or benefit from financial opportunities
• Accounting process setup, improvement, and documentation
• Accounting system selection, setup, customization, and training
• Chart of accounts optimization
• Accounts receivable support and analysis
• Job costing setup, reporting, and training
• Financial training to elevate skill sets of employees and owners
• Financial report review and guidance
• Hiring or supervising accounting staff

Many of these advisory services will not be needed every month. A great accounting team will be proactive and suggest services that will have a positive impact on your profitability.

CFO

Companies generating more than $5 to $10 million in annual revenue may need the expertise of a Chief Financial Officer. While a controller manages the historical financials of a business, the CFO is forward-looking and strategic. A CFO’s responsibilities include:

• Executive level decision-making and advisory services
• Strategy work with owners on business direction
• Working with investors, board members, and C-level executives
• Contract negotiations
• Compensation program design
• Complex financial regulation compliance

These five levels above are the core levels of accounting expertise. The smaller the business, the more they blend together.