Bookkeeper, Accountant, or Fractional CFO - Stewart and Smith Advisory

What your start-up actually needs at each stage

At some point in the first few weeks of running a start-up, almost every founder asks some version of the same question: do I need a bookkeeper, an accountant, or a CFO?

It sounds like a simple question. It is not.

The honest answer is that you probably need different things at different times, and the people who do each of these jobs are not interchangeable. A bookkeeper cannot advise you on your entity structure. An accountant cannot build you a 24-month cash flow forecast. A CFO should not be reconciling your bank transactions. Each role has a distinct function, and getting the timing wrong costs real money.

At Stewart & Smith Advisory, we work with founders and business owners from the day they incorporate right through to their exit. We have seen what happens when start-ups get the finance stack right, and what happens when they do not. This article lays out exactly what you need, and when.

PART ONE

The three roles – and why they are nothing like each other

Before we get into the stages, it helps to understand what each of these roles actually does. The confusion usually comes from the fact that all three involve numbers and money. But the similarity ends there.

The bookkeeper: looking backwards, keeping score

A bookkeeper’s job is to accurately record what has already happened in your business. They reconcile your bank accounts, code your transactions, process your invoices, run payroll, and produce a reliable set of numbers at the end of each month. They are the foundation of your financial operation, not glamorous, but absolutely essential.

What a bookkeeper does not do: advise you on tax, interpret your numbers strategically, or help you make decisions about the future of the business. They record the past. That is their function, and it is a valuable one.

In an Australian context, your bookkeeper should be Xero-certified or MYOB-qualified, understand BAS lodgement requirements, and have experience with single touch payroll. At S&S Advisory, our bookkeeping team – Sarah, Paula, and Jholikka – work exclusively in Xero, overseen by Tracey in her role as Finance Manager within the Fractional CFO team. Tracey prepares the month-end financials, systemises the month-end process, and ensures the reporting is CFO-ready. The bookkeeping function integrates directly with the accounting and CFO work across the rest of the business.

The accountant: looking backwards, reporting correctly

Your accountant handles the annual and quarterly compliance obligations that every Australian business has: tax returns, BAS, ASIC lodgements, financial statements, and proactive tax advice. They take the records your bookkeeper has maintained and use them to meet your obligations with the ATO and ASIC – and ideally, to structure your affairs so you pay the right amount of tax, not more.

The critical distinction that most founders miss: only a Registered Tax Agent (registered with the Tax Practitioners Board, or TPB) can legally charge for tax advice or prepare and lodge tax returns on your behalf. This is not a technicality. It is a legal protection for you. Before engaging anyone to handle your tax, check their registration at tpb.gov.au.

Similarly, only an ASIC Registered Agent can lodge documents with ASIC on your behalf – for company formations, director changes, share issuances, and other corporate secretarial work. These credentials matter, particularly in the early stages when you are establishing your company structure and need someone who can act, not just advise.

At Stewart & Smith Advisory, Mark Churchmichael, our Head of Tax and Compliance, is a Chartered Accountant and Chartered Tax Adviser with thirty years of experience. The firm is registered as both a Tax Agent (TPB) and an ASIC Registered Agent. For founders, that means one firm can handle entity formation, ASIC registration, ongoing compliance, tax planning, and BAS – with no need to engage separate providers for each function.

The fractional CFO: looking forwards, making decisions

A fractional CFO does something neither your bookkeeper nor your accountant is hired to do: they help you make decisions about the future of the business using financial information. Cash flow forecasting, financial modelling, scenario planning, capital raise preparation, board reporting, and strategic financial advice – these are CFO-level activities, and they require a different kind of expertise.

The word ‘fractional’ simply means part-time or embedded rather than full-time. For a start-up or growing business, this is almost always the right model. A full-time CFO in Sydney costs between $180,000 and $250,000 per year including on-costs. Most businesses under $10 million in revenue need ten to twenty hours of CFO-level thinking per month – not forty hours per week.

At S&S Advisory, our Fractional and Virtual CFO practice is led by Kim, supported by Nick who specialises in listed company and ASX advisory work, and Tracey who leads the SME and Entrepreneur client engagements. Together the team works with founders on the financial architecture their business needs to scale – building the dashboards and models that turn raw numbers into decisions, preparing the board packs and investor reports that raise capital, and sitting alongside founders in the conversations that determine the trajectory of their business.

PART TWO

The right support at each stage

Now that the three roles are clear, here is how they map to the stages of a typical Australian start-up. This is not a rigid prescription – every business is different, and the right answer depends on your specific situation. But these are the patterns we see consistently across the founders we work with.

This is the stage most founders rush. They incorporate quickly using an online service, pick whatever entity type seems easiest, and move on. The problem is that the right structure at incorporation depends on your personal circumstances, your growth plan, whether you have co-founders, and how you intend to extract wealth from the business over time. A thirty-minute conversation with a Chartered Accountant before you incorporate can save tens of thousands of dollars in restructuring costs five years later.

At S&S Advisory, we work with founders at this stage through our company formation and structuring service. As ASIC Registered Agents, we handle the ASIC lodgement directly – there is no need to use a separate formation agent and then engage an accountant afterwards.

The most common mistake at this stage is not getting bookkeeping in place early enough. Founders typically start thinking about it when BAS is due – and by then, three or four months of transactions need to be reconstructed from bank statements and email receipts. This is always more expensive than doing it right from the start.

The second most common mistake is using a bookkeeper who is not supervised by a qualified accountant. Bookkeepers handle the recording of transactions. They do not design your chart of accounts, advise on how to categorise a complex transaction, or flag when your structure needs updating. Without accountant oversight, small errors compound into significant problems by tax time.

At S&S Advisory, our outsourced accounting and bookkeeping service is an integrated offering. Sarah, Paula, and Jholikka handle the day-to-day bookkeeping in Xero. Tracey, as Finance Manager, oversees the team, prepares month-end financials, and systemises the reporting process so it is CFO-ready. Mark’s team handles compliance and tax questions above the bookkeeping layer. Founders get clean books, a Finance Manager ensuring the numbers are right, and a qualified Chartered Tax Adviser in their corner.

At this stage, the most useful thing a CFO does is answer the questions that keep founders awake at night. Can I afford to hire a senior person? When will I run out of cash if my biggest client delays payment? What does our margin look like by product line? These are not accounting questions, they are modelling questions, and they require a different kind of thinking.

At S&S Advisory, the Fractional CFO practice is led by Kim, with Tracey leading SMB and Entrepreneur client engagements and Nick focused on listed company and ASX advisory work. For founders at this stage, the engagement typically starts with a 13-week rolling cash flow forecast, so the founder can see around corners rather than reacting to what happened last month, and builds from there into monthly board reporting and strategic financial support.

The most expensive capital raise mistake we see at S&S Advisory is founders who start the process before their books and structure are ready. An investor’s legal team will find every structural problem, every late BAS lodgement, and every inconsistency in the financial model. These are not disqualifying issues if they are identified and fixed beforehand – but they are significant problems when discovered during due diligence, because they erode the investor’s confidence at exactly the moment you need it most.

Kim leads the capital raise engagements at S&S Advisory, having worked with pre-revenue and early-revenue companies as their Virtual CFO – building the financial model, producing the board pack, and sitting alongside founders in investor meetings. CosmoAesthetics, a medical technology company, started working with S&S Advisory before their first revenue and used the firm’s CFO and outsourced bookkeeping service through their capital raise process. The result was a board reporting structure and financial model that met institutional investor standards from day one.

The reason the S&S Advisory model works well at this stage is integration. Because the bookkeeping, accounting, tax compliance, and CFO services are all provided by one team, there is no version of events where the bookkeeper’s numbers do not match the CFO’s model, or where the accountant finds a tax problem the CFO was not aware of. The whole finance function is one team – which is exactly how an in-house finance function at a large business would operate, at a fraction of the cost.

PART THREE

The questions founders always ask

Can my bookkeeper do my tax return?

No. Only a Registered Tax Agent can legally prepare and lodge tax returns for a fee in Australia. A bookkeeper can maintain your records, but they cannot file your return or provide tax advice. Before engaging anyone who offers to handle your tax, check their registration at tpb.gov.au. S&S Advisory is a TPB-registered Tax Agent, which means every tax return we prepare and lodge is covered by that registration and the professional obligations that come with it.

Do I really need a separate ASIC agent for company formation?

For most founders, the simplest approach is to use an accountant who is also an ASIC Registered Agent, they can handle the company registration, the ASIC lodgement, and the initial structural advice in one engagement. Using a cheap online incorporation service for the company formation and then engaging an accountant separately for the structural advice means two fees and often a mismatch between what was set up and what should have been set up. S&S Advisory handles both as a single service for start-up founders.

When does a start-up need an R&D tax offset claim?

The R&D Tax Incentive is available to Australian companies undertaking eligible research and development activities, and the 43.5 per cent refundable offset is one of the most valuable tax incentives available to early-stage start-ups. The problem is that most founders either do not know they are eligible, or do not keep the records required to support a claim. The time to start is not at tax time – it is now. If your start-up involves any kind of product development, software engineering, novel process design, or experimentation that could fail, you should be having this conversation with a Chartered Tax Adviser immediately.

My accountant says they can do CFO work too. Should I just use them?

This depends entirely on what you mean by CFO work. An accountant can provide strategic tax advice and structural recommendations – these are genuinely CFO-adjacent activities. But building a twelve-month cash flow model, preparing a data room for a capital raise, structuring board reporting for investors, or providing scenario modelling for a major hiring or investment decision – these require a different skill set, different tools, and significant time. If your accountant is genuinely providing all of this, great. But make sure you are getting it, not just paying for it in theory.

What is the cheapest way to get this right?

Get the bookkeeping in place early and keep it current. This is the single most cost-effective investment a start-up founder can make. Clean, timely books mean a cheaper annual tax return, a faster capital raise due diligence process, and a reliable foundation for any CFO-level work later. The founders who end up spending the most on finance are the ones who ignored bookkeeping for eighteen months and then needed everything reconstructed at once.

PART FOUR

A practical checklist by stage

WORKING WITH S&S ADVISORY

One team across every stage

Most accounting and advisory firms ask you to make a choice: use us for compliance, or use a different firm for CFO work. We built S&S Advisory so you never have to make that choice.

Our team covers every stage of the journey described in this article. Bookkeeping and payroll in Xero, supervised by qualified accountants. Tax compliance and advisory from Chartered Tax Advisers who are Registered Tax Agents. Company formation and ASIC work handled by an ASIC Registered Agent. And Fractional and Virtual CFO services from commercially experienced CFOs with Big 4 backgrounds and real board experience.

When all of these services come from one team, two things happen. The advice you receive is better – because the person helping you with tax planning knows what the CFO is modelling, and the bookkeeper’s chart of accounts is built to support the reporting the CFO will need. And the cost is lower – because you are not paying for three separate firms to re-learn your business every time you need something.

About the author

Kim Stewart-Smith is the CEO and Founder of Stewart & Smith Advisory. She is a Chartered Accountant, Fellow of the Governance Institute (FGIA), Member of the Australian Institute of Company Directors (GAICD), Alumni of the Senior Executive MBA at Melbourne Business School and a former Oceania Corporate Services Leader at Ernst & Young. Kim serves as an ASX Non-Executive Director and Chair of Audit and Risk.

Stewart & Smith Advisory is a Chartered Accounting and Advisory firm based in Mosman, Sydney. The firm is a Registered Tax Agent (TPB), ASIC Registered Agent, and CA ANZ member. They work with ambitious Australian businesses from first incorporation through to exit.

Buildings 5&6, 1110 Middle Head Road, Mosman NSW 2088 | info@stewartsmithadvisory.com | stewartsmithadvisory.com.au

Disclaimer: This article contains general information only and does not constitute financial, tax, or legal advice. It does not take into account your personal circumstances. Before acting on any information in this article, you should consider whether it is appropriate for your situation and seek advice from a qualified professional. Stewart & Smith Advisory is a Registered Tax Agent (TPB Registration). All tax advice provided by the firm is covered by that registration.