As an entrepreneur, which of the following should you hire first: a financial planner or accountant? Statistically, 80% of small businesses don’t survive after 18 months. Taking inappropriate financial decisions is the primary decision that leads to their downfalls.
An entrepreneur has to understand the differences between these two terms. You may need to hire both in the long run. However, if you have just floated your business, then you must hire an accountant first. Approximately 50% of small businesses don’t appoint accountants. It seriously leads to lots of errors in the books of accounts.
The Right Time to Hire an Accountant
When your business is at its nascent stage, you should hire an accountant immediately. An accountant is your trusted confidante. Consult accountancy firms Coventry to entrust the accounting task to an experienced and well-reputed firm.
How Can An Accountant Help You?
The primary purpose of hiring an accountant is to save money. They know in and out of accounting and applicable rules. They will help you in adopting cost-cutting measures to avoid reckless spending.
If you own a residential property, an accountant can assist you in complying with the state laws and taxation rules.
Receiving a Large Fund
When you or your business receives a big amount of funds, either as a grant or gift, then you need an accountant or CPA (Certified Public Accountant) to ensure that all legal formalities are followed in the process.
Why Should You Hire a Financial Planner?
What’s the need for a financial planner when your accountant is already overseeing your books of accounts? That’s the mistake that most new entrepreneurs do.
An accountant can never take the place of a financial planner and vice versa. Both of them complement each other. You need the service of both of them.
A financial planner never looks into the nitty-gritty of accounting. He discusses vision, aspiration, financial needs, financial management, and debt-related issues with the entrepreneur.
How Can Your Financial Planner Help You?
A financial planner suggests vital tips to entrepreneurs from time to time regarding financial management. They will provide you with various investment options to earn profits. They also analyze the overall economic scenario and investment climate before offering you their advice.
They will guide you to make the right move when it comes to investing in insurance, real-estate dealings, and several other financial issues.
While hiring a financial planner, you should inspect their experience, expertise, knowledge, academic qualifications, and track records.
An accountant and financial consultant have different roles to play. Though both of them analyze the monetary aspect of a business firm yet their focus will be different.
An accountant ensures the accuracy of books of accounts while making sure that no penny is wasted towards unavoidable expenses. They oversee the day-to-day cash management and keep a full record of income, expenditures, purchase, sales, and bank deposits.
A financial planner, on the other hand, is a dreamer. He works in sync with the vision of the entrepreneur. He suggests profitable sectors where the entrepreneurs can invest in to make money. He looks into the long-term financial goal of the business and offers his advisory services to the entrepreneur.