Need financial guidance and not sure whether an accountant or financial adviser is right for you?

We reveal the differences between an accountant and a financial adviser in this handy guide.

There are a range of experts to help you make your business a success, but knowing who to call with a question that needs answering or a problem that needs solving is harder than it looks. 

In particular, it can seem like there is a lot of crossover between accountants and business advisers.

After all, they are both experts in the financial aspects of running a business.

There are, however, some important differences between an accountant and a financial adviser.

Making sure that you have a clear understanding of the two roles will help you get the best answer to your questions. 

The choices you make about your business finances are hugely important, so it’s always best to get an expert on your side. 

Every business owner should have an accountant and a business adviser, but a lot of people tend to think they do the same thing. 

This is not the case and knowing how exactly to use each could help you avoid issues and react much faster to opportunities.  

So, here are the main differences between an accountant and a financial adviser and how you can easily work out which one you should be calling.  

What does an accountant do? 

Accountants are highly qualified professionals. The reason it takes so much training to become one is because accountants provide hugely important services.

Generally, an accountant will take care of preparing financial documents such as profit and loss sheets, annual accounts and tax returns. They will also analyse business performance and budgets and provide tax advice.  

But this brief description doesn’t really do justice to how varied an accountant’s role can be.

To become a chartered accountant, a person has to pass exams in around 15 separate areas such as financial management, assurance and corporate reporting. 

Your accountant will stay on top of all the money going in and out of your business to ensure you are complying with tax laws and avoiding any potential pitfalls.

But the benefits they can provide go far beyond compliance.

They can also help you improve your cash flow, reduce costs, plan for growth, perform audits, handle financial reporting as well as advise on your personal finances, such as your pension.  

But importantly, they will reduce your workload as all these activities involve a large amount of time, attention and technical expertise.

Some business owners believe they can save a bit of money by trying to do all their accounting tasks themselves. They tend to quickly find that they don’t have much time for anything else. 

What does a business adviser do? 

Business advisers, sometimes called financial advisers, are not as involved in the day-to-day financial activity of your business.

Instead, they are focused on helping you achieve your strategic goals. They will work with you to identify your strengths and weaknesses and come up with the best ways to boost your growth.  

While your accountant is concerned with the nitty-gritty details of your daily activities, your business adviser will be more focused on the bigger picture and how best to position your business for sustainable, long-term success. 

Your business adviser could have started out as an accountant and may be able to perform some of the same duties.

But it is the forward-thinking, strategic nature of the role that really sets business advisers apart from accountants.

The kinds of activities that an adviser might focus on include developing your business strategy, business planning and organisational design.

Essentially advisers are primarily concerned with helping your business grow while accountants want to make sure everything you are doing is legal and sensible.

As we’ve seen, though, there is a large degree of overlap between the two, which can make figuring out which you need difficult. 

Accountants vs financial advisers - which one do I need?  

Every business is unique, but there are common challenges and choices that most business owners have to make at one point or another.

Let’s take a look at a few.  

Launching a new business  

When you first start your business, your tax affairs and financials are likely to be fairly simple.

An accountant is a good choice as they can help you fill out all paperwork and ensure you are set up and structured correctly. They could also help you select a pension scheme too.

Looking to expand into new areas or markets  

A business adviser will work with you to identify new opportunities and help you create strategies to take advantage of them.

Your accountant is likely to have a role here too, telling you how much additional funding you have at your disposal or helping you start saving. 

Dealing with tax changes  

Your accountant will be responsible for making sure that you are fully compliant with any changes to your business or property taxes.  

Acquiring a new business  

An important part of your business adviser’s role is keeping an eye on key developments in your market or local area.

There could be a new trend you can capitalise on, emerging technologies you can utilise or businesses that you can acquire.

While your adviser will help you identify these opportunities, it will likely be an accountant and solicitor who handle most of the paperwork and ensure all relevant fees and taxes are paid. 

Reducing your costs  

Your accountant has a close eye on how much you are spending daily. This makes them perfectly placed to help you make sure you are not spending money wastefully.

Your business adviser, on the other hand, might help you identify areas of your operations that are underperforming or need a new approach to unlock its full potential. 

Just like solicitors, accountants and business advisers train extensively to get the level of expertise they need to really add value to businesses.

They have likely had experience working with various other businesses so can spot common issues before they become a problem and help make sure you are managing your finances in the most effective way.

Making sure you use each to their full potential is an important part of making sure your business is in the best shape possible.  

Find an accountant or experienced adviser in your area quickly via Unbiased.

Don't forget to also check out our handy article on the differences between bookkeepers and accountants, too!

If you're just starting out on your journey into financial planning, it might be beneficial to learn more about the benefits of a financial coach vs a financial adviser.