When it comes to managing your finances, two professions can help you understand your finances and ensure you have a plan to get to where you want to be. Accountants and Financial Planners both play an essential role in financial success, but there are some important differences between the two.
For any successful business, it is recommended to have both an Accountant and a Financial Planner because their skills complement each other, and they can work well together to help you better meet your financial goals.
There are areas where they cross over. Both can help determine if your financial plans are achievable and can provide you with important strategies for managing your money. They can both advise you, but they cannot make decisions for you.
Here are the main differences between Accountants and Financial Planners.
Accountants
Your Accountant is responsible for undertaking analyses of your financial transactions, keeping accurate financial records and making summaries. Depending on their role or speciality, they may also undertake inventory accounting, financial forecasting and auditing.
Accountants will also help make sure your business is compliant with tax regulations and may advise you on financial issues, such as setting prices or wages, managing expenses, budgeting and decreasing costs. Additionally, they can help you determine the best way to set up your business, how to grow your business and how to increase your returns after-tax.
Further areas Accountants can help you include
- Preparing business plans
- Lowering your tax burden
- Payroll
- Selling, buying or merging a business
- Forensic accounting
Financial planners
Financial Planners advise you on your wealth management. Generally, they are specialists in areas such as managing your portfolio, or retirement planning. They may also advise you to build on your long-term wealth or solve your debt.
If you have specific financial goals in mind, turn to a Financial Planner to help develop the best path forward to achieve your goals and improve your financial wellbeing.
Specifically, financial planners can help you with
- Budgeting
- Portfolio construction
- Investing
- Estate planning
- Philanthropic strategies
- Cash flow modelling
- Inheritance tax planning
- Retirement planning
Who to hire and when
If you run a business, ideally, the thing would be to have both an Accountant and a Financial Planner on your team. They will both help you set up for success, develop strategies to enable you to thrive financially and lessen your risks. Often, Financial Planners will know of good accountants to bring onto your team, and vice versa.
If you can only afford to hire one, that one should be based on your specific needs. Talk to a Financial Planner if you’re working towards long-term wealth, considering investing, concerned about setting up your estate or any other financial goals. If your needs are more to do with running a business, dealing with your taxes, or daily transactional financial activities, an Accountant will help you.
Develop relationships with both
In an ideal situation, you would have both an Accountant and a Financial Planner on your team. Remember that for them to help you to their best abilities, they will need to get to know your plans, your challenges and also you. By developing a solid relationship with your Financial Planner and Accountant, and by being both open and transparent about your financial situations can better enable both to help guide you toward success.
Final thoughts
Whether you’re planning for your business or personal finances, it’s a good idea to have someone around who can provide you with expert advice and advise you on the best financial path forward.
If you have any questions, feel free to Join the conversation…