Many business owners think that their accountant can do both accounting and financial planning. However, the two roles complement each other, meaning neither professional can do the entire job of the other.
A financial planner may know some pretty intricate tax planning ideas and strategies, but an accountant knows how to get the most of your deductions while staying tax compliant. Today we are going to discuss the difference between a financial planner and an accountant, and how they both complement a business.
What is an Accountant?
An accountant is heavily involved and experienced in taxes and everything to do with them. From budgeting to tax preparation to sheltering and strategizing, taxes are their main focus. Further, this is also a broad category that encompasses so much more than what is on the surface.
If you run a small business, you might wonder why you need to spend money on an accountant, especially with the amount of tax software available.
However, your accountant is able to identify big picture opportunities and strategies that will help you get ahead. They can show you how to depreciate the right assets in the most productive way. An accountant can also advise whether your business structure is good for your business now and in the long run. Further, an accountant understands how the fine print in tax law to see how it affects you and your business.
Here are some business accounting issues your accountant can help you with:
- Financial statements
- Breakdown of expenses
- Tax preparation
- Tax law and how it affects your business
- Appropriate tax shelter recommendations
- Business growth and succession strategy in relation to taxes
- Audit representation
- Business structure recommendations and advice
While you will usually need to be specific about how you want your accountant to help, but their breadth of knowledge can be deep.
What is a Financial Planner?
While accounting is all about taxes, financial planning is all about investments. But while accountants can offer so much more than just filing taxes, financial planners can also do more than just invest your money.
A financial planners are very goal-oriented and holistic, with an eye to building wealth in the most effective manner. They take into account the life goals and needs of clients as individuals. For business owners, financial planners often provide a more comprehensive look at how your business fits into your life. This is from a logistical perspective as well as an emotional one.
Like accountants, financial planners are experts in their field and will identify opportunities that you might not know about.
Your financial planner can help you focus on:
- Asset allocation
- Estate planning
- Changes in the industry that affect you
- Insurance planning
- Wealth accumulation and protection
- Business structure and strategy tips
What to Look for in a Financial Planner and an Accountant
When you are looking for a financial planner or an accountant, the best way is to find someone you trust to get a referral, or look locally. Ask family, friends and colleagues who they use and schedule a meeting.
Or explore your local accountants and financial planners as you have the ability to meet them face to face, rather than doing business over email, phone or Skype. This can give you peace of mind when it comes to your finances – you can easily arrange face to face meetings with your accountant or financial planner.
It is important to look for a professional with a designation or degree, such as the internationally recognised Certified Financial Planner designation. It is also important to ask how they are paid, and get an annual estimate given their knowledge of your situation and business.
Further, make sure the professional in question is familiar with specific legislation that might be applicable to your situation. If you have an international or location independent business, then your accountant should be an expert in international tax law and your financial planner should know how best to structure your assets to be international accessible.
As a result, an accountant and financial planner are both integral to your business. While their roles overlap and both complement your business, they are different roles with different specialities and responsibilities.
As a business owner, it is by building a team of experts who support you and your business, that you stand the greatest chance of success. You work hard on and in your business, and you have a lot you want to achieve personally and professionally. As a result, you need a financial planner and an account who will be there to help you every step of the way!
For more information, please contact the team at Siragusa today. Our experts are here to help you grow your business from good to great.