BOOKKEEPER, CONTROLLER, CFO. THREE DIFFERENT JOBS.
A bookkeeper records what happened. A controller confirms the record is right now. A CFO decides what to do next. Most subcontractors between $1M and $12M have the first, borrow the second from their CPA once a year, and have never had the third. A better bookkeeper doesn't give you the other two.
Contractors ask this when the books are accurate and the business still doesn't make sense. Accurate books are only the first of three jobs. Below about $3M you can be your own controller, because you're close enough to every job to catch an error by feel. Between $3M and $12M that stops working. The usual response is to hire another bookkeeper. That improves the record and changes nothing about the decisions. Above roughly $12M to $15M, a full time CFO salary starts to make sense. Inside that middle band, the practical answer is one engagement covering all three. When three separate providers split the work, the money goes in the spaces between them.
WHAT EACH ONE DOES.
| Capability | Bookkeeper | Controller | CFO |
|---|---|---|---|
| Time direction | Backward, what happened | Present, is it right now | Forward, what happens next |
| Core output | Coded transactions and bank recs | A close you can rely on and a signed off WIP | A 13 week forecast and written decisions |
| Owns job cost structure | No, works inside it | Reviews it | Designs it against your estimating |
| Owns the overhead rate | No | Checks the calculation | Sets it and sends it into bidding |
| Answers can we afford this | No | No | Yes, simulated before you commit |
| Catches a losing job mid job | No | Yes, through cost to complete review | Yes, and changes the next bid because of it |
| Typical revenue where needed | Every company | $3M and up | $1M and up, full time above about $12M |
| What happens without it | No usable record at all | Reports nobody trusts | Accurate reports and guessed decisions |
All three jobs exist in every construction company, whether or not anyone is assigned to them. When nobody is, the owner does them at whatever hour is left.
THE TASKS EACH ROLE OWNS.
These are the tasks a construction company assigns to each role, taken from the full chart of who owns each task in a subcontractor. Open a role to see its tasks.
CFO, 5 tasks
- Set up the system. Set up the chart of accounts, which is the profit and loss statement at the business level.
- Set up the system. Choose the job cost codes, aligned with the business strategy and the work the company performs.
- Review the numbers every month. Build the 13 week cash flow forecast: week by week, with the bank account starting Monday and ending Sunday.
- Review the numbers every month. Build the CEO report: a rolling 12 months from the profit and loss statement and the balance sheet.
- Review the numbers every month. Send the WIP report to the bank or surety.
Controller, 15 tasks
- Set up the system. Set up the chart of accounts, which is the profit and loss statement at the business level.
- Set up the system. Enter the cost codes into the accounting software.
- Decide what to bid and win it. Open the project in the accounting system once it's awarded.
- Manage the job. Charge equipment to projects each month.
- Pay the crews and the vendors. Code credit card transactions and invoices to the job, using the cost codes set up at the start.
- Pay the crews and the vendors. Pay the invoices when the money comes in for the project, as long as there's a current COI and W-9.
- Pay the crews and the vendors. Hold retention on the subs, and track it on the sub's pay application.
- Bill and collect. Send lien waivers with the pay application, and collect them from subs when they're paid.
- Bill and collect. Send a weekly aging report.
- Bill and collect. If the contract's payment deadline passes without payment, send a notice of nonpayment with the intent to lien.
- Review the numbers every month. Close the books by the 10th: reconciled and balanced, so the numbers for that month and earlier months don't change.
- Review the numbers every month. Keep the WIP report current.
- Review the numbers every month. Send the WIP report to the bank or surety.
- Review the numbers every month. Bill retention at the time it can be collected.
- Close out. Close the project in the accounting system once all payments are received.
Accounting team (AP, AR and bookkeeping), 9 tasks
- Decide what to bid and win it. Open the project in the accounting system once it's awarded.
- Manage the job. Charge equipment to projects each month.
- Pay the crews and the vendors. Code credit card transactions and invoices to the job, using the cost codes set up at the start.
- Pay the crews and the vendors. Pay the invoices when the money comes in for the project, as long as there's a current COI and W-9.
- Pay the crews and the vendors. Hold retention on the subs, and track it on the sub's pay application.
- Bill and collect. Send lien waivers with the pay application, and collect them from subs when they're paid.
- Bill and collect. Send a weekly aging report.
- Bill and collect. If the contract's payment deadline passes without payment, send a notice of nonpayment with the intent to lien.
- Close out. Close the project in the accounting system once all payments are received.
See the Accounting team (AP, AR and bookkeeping) tasks on the full chart
WHEN THE PROBLEM IS THE RECORD.
Hire a bookkeeper when transactions are behind, the bank hasn't been reconciled in months, or nobody codes job costs at all. Fix that before anything else. Every report on the site needs a record to start from.
The common mistake is expecting this hire to fix a decision problem. Say your books are current and reconciled, and you still can't tell which jobs earn or when you'll be short on cash. The bookkeeper is doing their job. What's missing is above them. Replace them now and you get the same reports from somebody new.
WHEN YOU DON'T TRUST YOUR OWN REPORTS.
You need controller work when you catch yourself adjusting numbers in your head before you rely on them. That adjustment is the missing control. It usually starts between $3M and $6M. That's when the owner is no longer close enough to every job to catch a coding error by instinct.
A controller approves costs before they post. They catch double entries and missing accruals in the close. They reconcile the balance sheet to what's really there. They review WIP and cost to complete with whoever manages the job. Most companies in this band need the work and can't justify the salary, so they usually buy it from a firm.
WHEN THE PROBLEM IS WHAT TO DO NEXT.
You need CFO work when the numbers are right and the decisions are still guesses. Can we fund this bonus? Can we take a job 50 percent larger than our biggest? Is our overhead rate current? Which week are we short in nine weeks? A historical report can't answer those, however accurate it is.
A full time construction CFO usually starts to make sense above roughly $12M to $15M of revenue. Below that, the work is real and the salary isn't. That's why fractional CFO engagements exist for companies this size.
WHERE WE COME OUT.
For a commercial subcontractor between $1M and $12M, the answer is one engagement covering all three. The reason is scope gaps. A bookkeeper who doesn't own the job cost structure codes into whatever exists. A CPA who reviews once a year can't be the controller. Nobody in that setup is responsible for closing in time to change a decision. So the owner ends up connecting three vendors, and that's the job they have the least time for.
That's what we do. We aren't a bookkeeping firm and we aren't a CPA firm. We set it up so there are no spaces between the three jobs for money to fall through. If your books are behind, start there and fix the record first. None of the rest works without it.
FREQUENTLY ASKED.
