Accountant vs. Financial Advisor: Which Should You Hire?

When it comes to the financial well-being of your company, expert help can make an enormous difference. However, with so many financial professionals, each with their own areas of expertise, which is the right one to hire for your current need?

Accountants and financial advisors can each play a vital role in the success of a company, bringing distinct expertise to the table. This article breaks down the role of an accountant vs. a financial advisor and how to identify who can best support your company’s financial needs.

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 What Does an Accountant Do?

Of the two professions, accountants are more focused on regular business operations. They prepare and analyze financial reports and statements.

Accountants may be best known for their tax and compliance work, but their contribution extends beyond that. Here are several ways an accountant can benefit your business beyond compliance and tax strategy and preparation.

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Help You Prioritize to Create an Effective Business Strategy

As a business owner or executive, you may have a clear vision for how you want the company to grow. An accountant can help you set up key performance indicators (KPIs) to measure your progress toward your goals.

If you find you are not meeting your KPIs, the accountant can help you troubleshoot and reorganize to get back on track.

Keep Your Cash Flow Healthy

Cash flow is the lifeblood of any business. Maintaining a healthy cash flow requires careful monitoring of expenses and incoming payments. An accountant can help make sure you have the cash on hand that you need when you need it.

Healthy cash flow means avoiding the intense stress of not having liquid funds available to pay suppliers or payroll.

Manage Debt

Borrowing money to fund your business may be a brilliant way to support measured growth, but it requires careful consideration. An accountant can help you calculate if taking on debt is a wise choice. They can also help you find the best terms available for your business.

Chase Unpaid Invoices

Unpaid invoices are a drag on cash flow and profitability. Untracked invoices can go chronically overdue, and you may be continuing to provide products or services to a client who hasn’t paid you in months.

Accountants can carefully track invoices, establishing systems to remind clients to pay and making it easy for them to do so. They can also flag any chronic payment issues and bring them to your attention.

Smart Budgeting

Your accountant can work with you to produce a rigorous budget that supports your business goals. Having a clear and realistic understanding of your finances helps you make decisions with confidence.

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RELATED: 6 Skills to Look for in a Small Business Accountant

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What Does a Financial Advisor Do?

When looking at an accountant vs. a financial advisor, you’ll likely notice some overlapping skills and knowledge. But a financial advisor’s role is more focused on strategy. Financial advisors are best known for offering investment advice and management, but their skills extend far beyond that. Here are several ways a financial advisor can support a business beyond investment advice and planning.

Retirement Planning

A financial advisor can help with retirement planning in several ways. They can aid a business owner in their personal retirement planning, which some owners tend to neglect. They can also help find the right retirement plan for employees.

Retirement planning is one of several key perks that attract and retain employees. Your financial advisor can help you prioritize which perks make the most sense for your business.

Succession Planning

What happens to a business if the owner or top leadership retires or suddenly can no longer perform? It’s not something most people want to think about, but having a succession plan in place can preserve the longevity and success of a company.

Without a succession plan, a business may fail. The employees and customers are impacted. With a succession plan, the top leadership or business owner gets to identify exactly who takes over and prepare that person for the job.

A succession plan is also used by business owners who want to retire. Putting a plan in place a few years before you are ready to transition gives you ample time to establish the systems and people that can replace you.

Identify the Right Insurance Coverage

Financial advisors can help with risk management in several ways, including identifying the appropriate insurance coverage for a business. This may include employee health insurance, liability insurance, life insurance, and more.

Manage Personal and Business Finances

If you own a small business, your personal finances can impact your business finances and vice versa. While it’s essential to keep them separate, having a skilled financial advisor help you manage personal and business finances helps avoid common pitfalls.

Having a careful plan that funds your personal goals as well as your business goals is a recipe for long-term success.

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 Accountant vs. Financial Advisor: We Can Help You Decide

Many business owners have both an accountant and a financial advisor on their team. Combining their skills can provide a holistic approach to your business’s financial management. They can work together to align your financial records, tax planning, and overall financial strategies.

However, the individual you need right now will depend on the size of your business, your business goals, and the role you need them to fulfill.

An accountant will help with the day-to-day business financials, maintaining accurate records, ensuring compliance, and preparing financial statements.

A financial advisor helps with comprehensive financial planning, including long-term strategies, investment management, retirement planning, and risk management.

If you aren’t sure which professional will make the biggest positive impact on your business, connect with our team! We are experienced in assisting companies like yours in hiring financial advisors and top-notch accountants.