You’d be pushed to find any small business owner that actively enjoys managing the financial side of their entrepreneurial venture. But, they do it anyway, because they understand that keeping their finances in check and effectively planning ahead is vital for the ongoing success of their company.
In a 2017 study by Nesta, the innovation charity, four in 10 British entrepreneurs said that managing their finances and banking has become the most stressful part of running their business.
Balancing the books now takes up so much time that many business owners are forced to give up their evenings and weekends, with entrepreneurs spending an average of five hours a week of their personal time managing financial matters.
The stress of undertaking this necessary evil is proving too much for some, with one in six (17%) saying it has made them unwell. But, as the study’s author points out, for many SMEs, financial admin is “unnecessarily burdensome”.
Support and advice is out there, both for the here and now and the future. Is it worth seeking out? Well, that depends on how much you value your time and what you set out to achieve when you first started your business.
The question is, are you best off hiring an accountant or a financial planner? However, it’s not so much a question of one or the other, as both can bring their own set of benefits to business owners.
What benefits does an accountant bring?
It’ll come as no news to you that accountants are tax specialists, but that’s not where their knowledge ends. Their experience working with lots of different companies means that they can provide business advice as part of the service on many things, including:
· Depreciation of assets
· Expense breakdown
· Tax shelter recommendations
· Tax preparation
· Financial statements
· Growth and business strategy both from a tax and general business perspective
In the main, accountants are all about the here and now – helping your company comply with all the necessary laws and regulations and advising on how to keep as much money in the business as possible.
Accountants can be life savers for those business owners who are drowning in their bookkeeping by taking on those tasks, freeing you up to do what you do best: running your business.
Some owners are begrudged to pay for an accountant because they can do the work themselves – but that time can be much better spent, either inside or outside your business. After all, you didn’t start your business to be a glorified accountant.
What benefits does a financial planner bring?
While accountants are focused on the previous and the next financial year, financial planners look at the bigger picture and plan ahead so that your business can grow. The services of a financial planner include:
· Planning investments
· Allocating assets
· Carrying out estate & insurance planning
· Organising business structure
· Generating business strategies
· Seeking to protect/maximise assets & wealth
In other words, financial planners are as concerned about your future as they are about your today. Realistically, unless you’re a financial expert, you won’t have the knowledge to plan your finances quite as effectively as a financial planner would. They’re able to spot opportunities and threats in the market you may not pick up on until it’s too late – because you’re busy running your business – so you can be confident that your future is in good hands.
Ultimately, it’s the peace of mind that you’re doing everything you can to protect the wealth of your personal and company finances that a financial planner can provide. In many ways, that’s worth its weight in gold.
An accountant or a financial planner?
Sure, there’s a bit of crossover between what an accountant and a financial planner can offer your business, i.e. both can provide astute financial advice that can help your company flourish. But a good financial planner will take a longer and a wider view of your finances, assessing and planning your personal situation – retirement, children, financial security and so on – rather than just solely looking at your company’s books and records.
That’s why we’re so adamant that business owners require both an accountant and a financial planner. Largely, they’re serving different purposes.
If you’re ready to take a wider view of your business finances, talk to Outbound Solutions today. We can connect you with financial advisors and wealth managers who can help you see the bigger picture.