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Accountants vs financial advisers: what’s the difference?

It is possible to find a whole host of experts waiting to help you grow your business. Nonetheless, knowing who to call when you have a question that needs answering or a problem that needs resolving can be harder than it might appear. Particularly, there can be a lot of crossover between Accountants vs financial advisers. They both have extensive experience with the financial aspects of running a business. However, there are some key differences between an accountant and a financial adviser. Having a clear understanding of the two roles will help you get the best answer to your questions.

The decisions you make regarding your business finances are incredibly important, so it’s best to get a professional on your side. There is no reason why a business owner shouldn’t have an accountant and a business adviser, but some people think that they’re the same thing. In fact, this is not the case, and knowing exactly how to use each could help you avoid issues and take advantage of opportunities more quickly.

Following are the main differences between an accountant and a financial adviser, so you can easily determine which one you should seek out.

How does an accountant work?

Accounting professionals possess a high level of expertise. There is so much training involved in becoming an accountant because accountants have been providing crucial services to businesses for hundreds of years. The work of an accountant typically involves preparing financial documents such as profit and loss statements, annual accounts, and tax returns. An accountant will analyze business performance, develop budgets, and give tax advice.

A brief description of an accountant’s role does not do it justice because the role can be quite varied. In order to become a chartered accountant, a person has to pass exams in around 15 different areas such as financial management, assurance, and corporate reporting.

Keeping your accountant aware of all the money going into and out of your business is crucial to ensuring compliance with tax laws and avoiding potential pitfalls. However, they can provide benefits far beyond compliance. Furthermore, they can assist you in improving your cash flow, reducing costs, planning for growth, performing audits, handling financial reporting, and advising you regarding personal finances (such as pension planning).

In addition, all of these activities require a significant amount of time, attention, and technical expertise, which will reduce your workload. Many business owners believe they can save money by handling all their accounting tasks themselves. They quickly find that they do not have much time for anything else.

How does a business adviser help businesses?

The day-to-day financial activities of your business are not the focus of business advisers, sometimes called financial advisers. They are more concerned with helping you achieve your business’s strategic objectives. You will be helped to determine your strengths and weaknesses so they can devise the best ways to boost your growth.

A business adviser is more focused on the bigger picture and how to position your business for sustainable, long-term success, whereas an accountant is concerned with the details of your day-to-day activities.

A business adviser may have started out as an accountant and be able to perform some of the same tasks. However, what sets business advisers apart from Accountants vs financial advisers is the forward-looking, strategic nature of their role. As an adviser, you might also be focused on developing a business strategy, planning for your business, and designing your organization.

Advisers are concerned with helping your business grow, while Accountants vs financial advisers want to ensure everything you do is legal and prudent. Despite this, though, we’ve seen that the two overlap a lot – which can make figuring out what you need difficult.

Which one do I need, an accountant or a financial adviser?

While every business is unique, there are some common challenges and decisions that most business owners have to make at some point in time. Let’s explore a few.

Establishing a new business

Your tax affairs and financials are likely to be pretty simple when you start your business. Accountants are a good choice since they will be able to help you fill out all the paperwork and make sure that you are set up and structured correctly. Additionally, they may be able to assist with pension selection. At this point, a financial advisor may not be necessary.

Interested in expanding into new areas or markets

The business adviser will identify new opportunities for you and help you create a strategy to capitalize on them. In this case, your accountant is likely to play a role, letting you know how much additional funding you have or helping you begin saving.

How to deal with tax changes

It is your accountant’s responsibility to ensure that you are completely compliant with any changes to your business or property taxes.

The process of acquiring a new company

Keeping an eye on key developments in the market or local area is an important part of your business adviser’s job. Perhaps a new trend could be coming that you can take advantage of, a new technology that you could use, or a business that you could acquire. The adviser will help you identify these opportunities, but it will likely be your Accountants vs financial advisers and solicitors who will handle most of the paperwork and ensure that all fees and taxes are paid.

Taking steps to reduce costs

Accountants keep track of how much they spend on a daily basis. Consequently, they are perfectly positioned to make sure you don’t waste money on unproductive purchases. On the other hand, your business adviser may be able to help you identify areas of your operations that need to be improved or redesigned in order to reach their full potential.

As with solicitors, Accountants vs financial advisers undergo extensive training to gain the level of expertise they need to add real value to a business. Having experience in working with a variety of businesses means they can identify problems before they become a problem and help you ensure your finances are managed in the most efficient way. Using each of them to its maximum potential is a vital part of ensuring your business is in the best possible shape.

Use the search tools on Best Bizz to find an accountant or experienced adviser near you. Check out our handy article about the differences between bookkeepers and Accountants vs financial advisers as well! You might also benefit from learning more about the differences between a financial coach and a financial adviser if you are just beginning your venture into financial planning.

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