“Do I need a bookkeeper, a CPA, or a CFO?” If you have asked yourself this question recently, you are not alone. The titles get used interchangeably in conversation, but they are three different jobs that do different things at different price points. Hiring the wrong one for your situation is expensive in two directions: pay too much for what you do not need, or pay too little for what you actually need and miss critical financial work. Here is a clear breakdown.
Quick answer table
- Bookkeeper — Records what happened. Reconciles accounts. Produces financial statements. Backward-looking, transactional.
- CPA — Files complex taxes and audits. Provides tax strategy and audit-ready financial statements. Compliance-focused.
- Fractional CFO — Helps you decide what to do next. Cash flow forecasting, KPIs, growth planning. Forward-looking, strategic.
Most growing businesses end up needing two or three of these roles over time, often filled by different people. Let us unpack each.
What a bookkeeper does
A bookkeeper is your financial historian. Their job is to make sure every transaction your business made — every sale, every purchase, every payroll, every bank fee — is recorded accurately and categorized correctly in your accounting software (usually QuickBooks Online or Xero). They reconcile your accounts every month to make sure your books match your bank statements. They produce financial statements (Profit & Loss, Balance Sheet, Cash Flow Statement) so you can see how your business is performing.
What bookkeepers typically do:
- Record financial transactions
- Reconcile bank and credit card accounts
- Manage accounts receivable and accounts payable
- Process payroll (often)
- File sales tax returns
- Produce monthly financial statements
- Support your tax preparer at year-end
What bookkeepers typically do NOT do: File complex tax returns, provide formal audit opinions, give strategic financial advice on major decisions, or build forward-looking forecasts.
You need a bookkeeper if: You are spending more than 2–3 hours a week on bookkeeping yourself, you are behind on your books, you do not know what your gross margin or monthly profit is, or you are entering tax season with no clean records.
Typical cost: $300–$1,200/month for Rhode Island small businesses.
What a CPA does
A Certified Public Accountant is a state-licensed professional who has passed the Uniform CPA Exam and met experience requirements. Only CPAs can provide certain services — most notably, they are the only ones who can issue audit opinions on financial statements. CPAs are the right call for complex tax work, audits, and certain regulated financial reporting.
What CPAs typically do:
- Prepare complex federal and state tax returns (corporate, partnership, trust, multi-state)
- Provide formal tax strategy and tax planning
- Represent you before the IRS in audits and disputes (along with Enrolled Agents and attorneys)
- Issue audited financial statements required by banks, investors, or regulators
- Provide attestation services
What CPAs typically do NOT do day-to-day: Most CPAs do not handle ongoing bookkeeping. Their time is too expensive to be reconciling your QuickBooks every month. Many CPAs partner with bookkeepers — the bookkeeper keeps the books current, the CPA does the tax work at year-end.
You need a CPA if: Your business has multiple entities, multi-state operations, complex tax structures, investors requiring audited financials, or you are in an IRS dispute. For straightforward small business returns, a qualified tax preparer (with a PTIN, often an Enrolled Agent) can often handle filings at lower cost.
Typical cost: $150–$400/hour for engagement work. Complex business returns often run $1,500–$5,000 annually. Audited financial statements can run $10,000+.
What a Fractional CFO does
A Fractional CFO (also called Outsourced CFO or Part-Time CFO) is a senior financial executive who serves multiple businesses on a fractional basis — typically a few hours to a few days per month per client. They do the strategic financial work that bookkeepers do not do and CPAs do not stick around long enough to do. Their job is to look forward, not backward.
What fractional CFOs typically do:
- Build and maintain a 13-week cash flow forecast
- Develop and track KPIs that actually matter for your business
- Build annual budgets and quarterly reforecasts
- Advise on major financial decisions (pricing, hiring, debt, equity)
- Review financial statements with you monthly
- Help you prepare for fundraising, financing, or selling your business
- Improve gross margin and profitability
- Stress-test your business model
What fractional CFOs typically do NOT do: Day-to-day bookkeeping or tax filings. A fractional CFO works on TOP of clean books — they will not do the bookkeeping themselves but will tell you when your books need cleaning up.
You need a fractional CFO if: Your business is doing $500K–$5M in revenue, you are growing or want to grow, you are making decisions based on gut not numbers, you are running into cash flow surprises, or you are tired of being “profitable on paper but broke in real life.”
Typical cost: $1,500–$5,000/month depending on engagement scope. Much less than a full-time CFO ($150K–$300K/year all-in), much more than just bookkeeping.
The most common stacking pattern
For growing small businesses, the typical evolution looks like this:
- Year 1, under $250K revenue — DIY bookkeeping or basic bookkeeper. A tax preparer for the annual return. Total: $500–$2,000/year.
- $250K–$500K revenue — Monthly bookkeeper. Tax preparer (or CPA if complex). Total: $5,000–$10,000/year.
- $500K–$2M revenue — Monthly bookkeeper + Fractional CFO. CPA at year-end for complex returns. Total: $25,000–$60,000/year.
- $2M–$10M revenue — Full bookkeeping team + Fractional CFO transitioning toward full-time. CPA firm relationship. Total: $60,000–$150,000/year.
Three things people get wrong
1. Hiring a CPA to do bookkeeping
You will pay $200/hour for someone overqualified to categorize Uber receipts. Bookkeepers do this work at $40–$80/hour effective rate and do it just as well.
2. Expecting a bookkeeper to be your CFO
Bookkeepers tell you what happened. They are not trained or compensated to tell you what to do next. If you keep asking your bookkeeper “what should I do about X?” — you actually need a CFO advisor.
3. Waiting too long to add a CFO
Most owners wait until they have a financial crisis to add a CFO. By then the runway is gone. A fractional CFO at $2,000/month BEFORE the crisis prevents the crisis. After it, the cost is much higher.
How Tradepoint CFOs fits
Tradepoint CFOs combines monthly bookkeeping with fractional CFO advisory for Rhode Island small businesses — under one engagement, with clean handoffs to a tax preparer or CPA when you need one. We are not a CPA firm; we partner with CPAs when our clients need specialized tax work. For most growing small businesses, this stack is enough.
Not sure which roles your business actually needs? Schedule a free 30-minute consultation and we will help you map it out — even if it turns out you need someone else.
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