Recent LinkedIn posts seem to diverge on the proper role of a CFO. There are two schools of thought. One warns against overpaying for a glorified bookkeeper masquerading as a CFO.  “Bookkeeping is clerical — don’t pay a CFO to do bookkeeping.”

Another describes bookkeeping as fundamental; fit for strategic oversight at the CFO level.

Here’s the truth:

1. Bookkeeping Is Strategy in Small and Mid-Sized Agencies

Accurate, timely, automated bookkeeping unlocks:

• Daily cash clarity
• Real trust account accuracy
• Real-time remittance understanding
• Automated reconciliation
• Accurate client P&Ls
• True cost-per-collector metrics
• Reliable forecasting
• Automated dashboards
• Compliance confidence
• Early detection of financial problems
• Better pricing strategies

In a collections business where every dollar flows through trust accounts, payment processors, remittance files, and client-specific commission rules “bookkeeping” is actually the backbone of the business model.

When bookkeeping is sloppy or late:

• Cash flow forecasts fail
• Trust accounts go out of balance
• Reconciliations stack up
• Controllers get overwhelmed
• Month-end becomes a fire drill
• Compliance risk skyrockets
• Management flies blind
• Clients lose trust
• And ultimately agencies lose placements

This is existential; it is not clerical.  And do not even think about M&A, buy or sell side, without first establishing foundational, consistent, sound bookkeeping – unless of course you are happy with very low single digit multiples applied to compensate for the high risk that disorganized financial records attract. Disorganized records even at the simples of sales tax levels can lead to valuation risk discounts in the millions of dollars.

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2. The Age of AI Changes the Role of “Bookkeeping” Forever

We are entering a period where AI can:

• Auto-categorize transactions
• Detect anomalies
• Match payments to accounts
• Reconcile bank and trust transactions
• Predict missing entries
• Clean chart-of-accounts errors
• Identify client billing issues
• Prepare draft journal entries
• Assist month-end close

These tasks used to be “clerical.” They will soon be machine-augmented and enormously strategic. Divergence on the role of the CFO will be convincingly eliminated.

The agency that has:

• clean data
• correct coding
• accurate allocations
• automated reconciliation
• standardized processes

…will be able to adopt next-generation AI tools much faster than agencies who rely on humans stitching financials together in spreadsheets. The bookkeeping foundation becomes the AI foundation.

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3. The Best CFOs in SME’s Will Embrace Bookkeeping, Not Shun It

A great CFO for an SME will:

• Oversee all workflows that touch money
• Architect chart of accounts
• Standardize posting and reconciliation processes
• Implement automated tools
• Build Excel/AI-driven reconciliation models
• Consolidate client-level P&Ls
• Establish trust controls
• Train staff
• Manage system migration
• Create dashboards
• Own the monthly close
• Own the compliance reporting
• Partner directly with the owner/CEO
• Translate bookkeeping into strategy

The CFO who says, “Bookkeeping isn’t my job” is the wrong CFO for a small or mid-sized agency. The CFO who says, “Bookkeeping is the foundation of strategy – who aims to strengthen it, automate it, and elevate it,” is the one who delivers real transformation – regardless of your exit or growth strategy. By the way, that CFO will also do your budgeting, forecasting, KPI monitoring and forward-steering FP&A – those same strategic functions expected of any true CFO.