Accountants and Your Family Business

Do You Need an Accountant or Financial Planner?

Having someone with expertise manage your finances can mean seeing your money grow and taking advantage of all potential tax breaks and investment opportunities. Typically, there are two types of financial experts you might hire for yourself, an accountant or a financial planner. How do you know which one you need and how are they different? Note the following.

1. Past versus the future

One main difference between an accountant and a financial planner is that an accountant is typically concerned about the past whereas a financial planner is concerned about the future. What this means is that an accountant will review the money you've earned and note the best way to file your taxes in order to save money, and they may advise on different accounting methods that work for you or for your business.

A financial planner is concerned about how to make the money you've earned grow over time. Rather than simply looking at your books and finances as they stand today, they will be concerned with your long-term financial planning goals and what you want those finances to look like in a year, five years, ten years, and so on. If you're looking to make plans for your future when it comes to your finances, then a financial planner is typically the better choice.

2. Specialties

Accountants and financial planners may have specialties that make them a better choice in certain cases and for certain needs. For example, an accountant who specialises in small businesses might give you the best advice on how to manage your income and deductions when you're self-employed. An financial estate planner can help you to understand how to word your will and set up trusts and other such arrangements so that your family faces the smallest tax bill after your death. To decide if you need an accountant or financial planner, check on the various specialties that are offered, and this will help you decide on the right choice for you.

3. Licensing

If you want to have your money grow through investing and don't have the time or resources to buy stocks yourself, you need to ensure you hire someone who can do this for you. Accountants may not have the right licensing and know-how to actually invest your money for you. A financial planner may also work as an investor so that he or she can not only give you advice on how to grow you money but also handle the investing needed so that you don't need to do this on your own. Be sure to check on their licensing and what other services they can offer when choosing between an accountant and financial planner.