If you need assistance with the financial operations of your company, you could be contemplating who to hire between a financial accountant and a financial adviser.
A financial accountant and a financial adviser seem to provide services that are quite similar, but there are significant legal distinctions that need to be considered. The degree and level of help you require for your company's finances and the main goal for hiring assistance will determine which option is ideal for you and your circumstances.
Who are financial advisers?
As we have seen in our blog last week, financial advisers evaluate their clients' financial situations and offer recommendations to help them create an investment plan. They offer financial strategies that take into consideration all of their clients' requirements, which may include both short- and long-term goals.
Who are financial accountants?
Financial accountants are not permitted to advise you on how to manage or invest your money, even when doing so would be based on your present accounts payable and receivable. They can only draw your attention to potential risks or areas where you have the option of putting more emphasis. Crucially, they are unable to provide any financial advice on investments.
Financial statements including profit and loss statements, annual reports, and tax returns are often prepared by a financial accountant. Additionally, they will offer tax assistance and analyse business performance and budgets.
A financial accountant will keep track of all money coming into and going out of your company to make sure you are adhering to tax regulations and avoiding any possible hazards. They will assist you with financial reporting, audits, cost-cutting, growth planning, and cash flow improvement.
Having a financial accountant on board from the start helps simplify operations and increase security overall. By doing this, you will significantly lower your chances of experiencing any unfavourable financial or tax related problems in the future.
Although your company can handle accounting internally, it is always preferable to have an independent financial accountant on hand who can provide a clearer picture of your company's finances.
Financial advisers vs financial accountants - which one do I need?
Despite the fact that every business is different, most business owners eventually face a similar set of issues and decisions.
Launching a new business - Your tax obligations and financial circumstances are probably straightforward when your business initially begins its operations. A financial accountant is a wise choice in this situation since they can assist you in completing all the necessary paperwork and ensure that you are set up and prepared. A financial adviser may also play a part in this by assisting you in identifying business opportunities.
Looking to expand into new areas or markets - A financial adviser will assist you to find new opportunities and assist you in developing strategies to seize them. A financial accountant may also play a part in this, estimating the amount of additional funds you have available or advising you to save
Dealing with tax changes - Any changes to your business or property taxes must be thoroughly complied with, and it is a financial accountant's responsibility to ensure this.
Acquiring a new business - The responsibility of a financial adviser includes keeping a close watch on significant changes in your market or surroundings. You might be able to take advantage of a new trend, utilise cutting-edge technology and buy or merge with businesses. A financial accountant and a lawyer will likely handle the majority of the paperwork. They will also make sure that all applicable fees and taxes are paid. While a financial adviser will assist you in identifying these possibilities.
Reducing your costs – A financial accountant will closely monitor how much you spend daily. They are therefore in the ideal position to assist you in ensuring that you are not throwing money away. On the other hand, a financial adviser would be able to assist you in identifying areas of your operations that are underperforming or require a new strategy to reach their full potential.
In summary, now that you are clearer on the roles of the financial adviser and financial accountant, review your current situation and decide which option is best for you or your organisation to manage and maintain sound finances.
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