CFO vs CPA: What's the Difference and Which Do You Need?

"Should I hire a CFO or a CPA?" is one of the most common questions business owners ask when they realize they need financial help beyond basic bookkeeping. The answer isn't either/or—these roles serve different purposes and many businesses benefit from both.

Let's break down exactly what each role does, how they differ, and which one (or both) your business needs.

What Is a CPA?

A Certified Public Accountant (CPA) is a licensed accounting professional who has passed the rigorous CPA exam and met state licensing requirements. CPAs are regulated professionals—like doctors or lawyers—with specific legal privileges and responsibilities.

What CPAs Do

• Tax preparation and planning: Filing business and personal tax returns, identifying deductions, managing tax liability
• Audits and reviews: Conducting financial statement audits for compliance, investors, or lenders
• Compliance: Ensuring financial statements meet GAAP standards and regulatory requirements
• Historical reporting: Preparing accurate financial statements based on past transactions
• Advisory services: Tax strategy, entity structure, retirement planning

The key characteristic of CPA work: it's primarily backward-looking. CPAs analyze and report on what already happened, ensuring accuracy and compliance.

What Is a CFO?

A Chief Financial Officer (CFO) is an executive leadership position responsible for the overall financial strategy and health of a company. Unlike CPA, "CFO" isn't a credential—it's a job title that requires a broad skill set.

What CFOs Do

• Financial strategy: Developing plans to achieve business goals, allocate capital, and drive growth
• Forecasting and planning: Building budgets, projections, and scenario models
• Cash management: Ensuring the company has adequate cash and managing working capital
• Fundraising: Securing debt or equity financing, managing investor relations
• Decision support: Analyzing options and advising leadership on major decisions
• KPI development: Identifying and tracking metrics that drive business performance

The key characteristic of CFO work: it's primarily forward-looking. CFOs focus on what should happen next and how to get there.

CFO vs CPA: Side-by-Side Comparison

When Do You Need a CPA?

Almost every business needs a CPA for:

• Annual tax return preparation
• Tax planning and strategy
• Quarterly estimated tax payments
• Audited or reviewed financial statements (if required)
• Entity structure decisions (LLC vs S-Corp, etc.)

Even sole proprietors with simple taxes benefit from having a CPA review their situation annually. The cost is typically $2,000-$15,000 per year depending on complexity.

When Do You Need a CFO?

You likely need CFO services if:

• Revenue exceeds $2M and financial complexity has increased
• You're seeking financing (loans, credit lines, investors)
• Cash flow is a constant concern despite healthy revenue
• Major decisions loom (acquisition, expansion, exit)
• You need strategic guidance your CPA can't provide
• Investors or board members expect professional financial leadership

Most growing businesses eventually need both roles—a CPA for compliance and taxes, and a CFO for strategy and planning.

Can One Person Do Both?

Technically, yes. Some CPAs also serve as fractional CFOs. However, the skill sets are different:

• CPA training emphasizes compliance, audit procedures, and tax law
• CFO skills require strategic thinking, business acumen, and leadership

A CPA who excels at tax work may not have the strategic mindset needed for CFO work. Conversely, an excellent CFO may not hold a CPA license. When evaluating candidates, focus on the specific skills you need rather than credentials alone.

How They Work Together

In well-run businesses, CPAs and CFOs complement each other:

• The CFO develops the financial strategy and forecasts
• The CPA ensures tax-efficient execution and compliance
• The CFO manages cash flow and working capital
• The CPA handles tax planning and preparation
• The CFO prepares investor/board materials
• The CPA provides audited statements when needed

Smart business owners maintain relationships with both professionals and ensure they communicate with each other.

Bottom Line

Don't think of it as "CFO vs CPA"—think of it as understanding what each role provides so you can build the right financial team for your stage of growth.

• Every business needs a CPA for taxes and compliance
• Growing businesses ($2M+) often need a CFO for strategy
• Fractional CFO services make CFO expertise accessible at any size

If you're wondering whether you need CFO-level support, schedule a free consultation to discuss your situation. We'll give you an honest assessment of whether CFO services would benefit your business.

Frequently Asked Questions