Perhaps these two terms well heard and seems to be known to almost every entrepreneur. Most of them use these terms as synonyms to each other and for them these are one of the same thing. Despite of Finance and Accounts both work on and for the balance sheet and P&L account of the company, both are two different side of the same coin, which can’t be the same.
The common point between both finance and account is present time and activities. Accounts look the present and records it and creates history and Finance looks for the present to make the future beautiful one. Accounts looks what you have done or you are doing and how to record it in better way with true figures. Finance looks for what we are doing and how better or in alternate way this can be done to make future better or to reach at desired goal.
Some author has coined the words “Romancing the Balance Sheet”. Account and Finance both do this romance but in their own different styles. Both CA (Accounts) and CFO (Finance) reads and run through the numbers, but they have different purpose. CA (Accounts) looks the number to monitor, where we have reached compared to our plan. While CFO (Finance) looks the number to check where we are and plan for how to reach to our desired target. Financial management decisions can be made in better way by the professionals (like Call2CFO)/ executives (like fulltime CFO), who totally understand the implication of the decisions not only financially but also operationally.
Financial management decisions like taking asset on lease versus buying, own production versus license manufacturing, credit period versus price discount, cash discount versus trade discount, permanent staff versus contract staff, fulltime versus part time professional, subsidy/tax incentive versus higher operational cost, debt versus equity and many more, are some of the critical financial decisions that an entrepreneur has to makes. Entrepreneur most of the time focus exclusively on the number of days receivable and days payable, while unknowingly or some time knowingly they ignore the time value of money when evaluating trade-offs between critical things like credit period and price discounts and the time spent by raw material at various stage of the manufacturing process. This is largely due to not having the expertise to measure these parameters and not realizing the importance to such measurements. Call2CFO is the organization, who works for you on each of such aspect.