Accountants vs financial advisers: what's the difference?

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.  

However, 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, equally 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 their available time for addressing other important tasks and issues is limited.

What does a financial adviser do? 

Financial advisers, sometimes called business 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 financial 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.

However, 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 are trained to ensure that 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 is best for me?

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 the necessary paperwork and ensure that your operations are set up and structured correctly. They could also help you to select a pension scheme that best meets your individual needs.

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  

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

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

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

Reducing your costs  

Your accountant will keep a close eye on how much you are spending daily. This enables them to help you make sure that 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 their 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, and can spot common issues before they become a problem. Additionally, they can help to ensure that you are managing your finances in the most effective way.

Using each professional’s skills and abilities to their full potential is an important part of keeping your business in the best shape possible. 

Get expert financial advice

Accountants and financial advisers both have vital roles to play in maintaining the health of your personal and business finances.

While accountants specialise in handling financial and tax documents and providing day-to-day financial management services, advisers support your growth by assisting you in achieving your strategic, long-term financial goals.

If you're just starting on your journey into financial planning, learn more about the benefits of a financial coach vs a financial adviser by letting Unbiased match you with a financial expert who has the knowledge you need to secure your financial future.

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