Business Advisor vs. Accountant: Understanding the Key Differences (and why you may need both)
If you’re a small business owner, you’ve probably found yourself in this situation. You are sitting across from your accountant, hoping they can help you figure out how to grow your business, increase profits, or navigate a challenging decision. But instead you walk away with perfectly accurate books and tax return, wondering why you still feel stuck.
Here’s the reality - you might be expecting your accountant to also be your business advisor, and while there are some excellent accountants out there that do offer advisory services, these are two very different skillsets with distinct purposes.
What does an Accountant do?
Accountants are absolutely essential to your business success. Your accountant is your financial historian and compliance guardian. They are the ones that:
Keep your financial records accurate and organised. Every transaction, every receipt, every payment gets categorised and recorded properly. This is the foundation on with everything else is built and is vital.
Handle your tax obligations. They know tax rules inside and out, making sure you are taking advantage of every deduction while staying completely compliance. The are saving you from either overpaying or underpaying and getting into trouble with the tax authorities.
Prepare financial statements. The profit and loss statements, balance sheet and cashflow forecasts are the output from the accurate records already prepared. These are a translation of your business activity into a clear financial picture.
Ensure compliance. From PAYE to VAT, Corporation tax to self assessment and any other regulation, your accountant is making sure you are dotting the i’s and crossing the t’s.
Think of your accountant as someone who tells you exactly what happened financially in your business. They are looking backwards at your numbers and making sure everything is accurate, legal and properly documented.
What does a Business Advisor do?
A business advisor is focused on what is coming next. They take the same financial numbers that your accountant has prepared and asks ‘how can we use these to improve your business?’ They:
Analyse trends and patterns. While your accountant tells you that sales were down last quarter, your business advisor helps you to figure out why and what to do about it.
Help with strategic planning. What are your next steps? Should you expand into new markets? Hire more staff? Invest in new equipment? These are the conversations you would have with a business advisor.
Focus on growth and optimisation. They will constantly be helping you to look for ways to improve your cashflow, increase profitability and streamline operations.
Ask tough questions. They will challenge your assumptions and push you to think differently about your business.
As a practical example your accountant will tell you you made £30k last quarter, your business advisor will take this information and help you work out how to make £50k in the coming quarter.
Why does this Confusion Exist?
Why do so many business owners expect their accountant to be their strategic advisor?
Accountants see all your financial data and they have an intimate understanding our your business finances. It seems natural that they would be the ones to help you make decisions based on financial data.
You already have a trusted relationship with them. You may have worked with them for years and it feels easier to get advice from someone who already knows your business.
There is also the cost consideration of working with one professional rather than two.
Whilst these are all valid points and some accountants do offer excellent advisory services it is important to understand that, just because someone is great at the technical side of accounting, this doesn’t automatically make them great at strategic planning and this is ok.
The Skills are Different
Accounting requires precision, attention to detail and deep knowledge of financial regulations and tax law. It’s about accuracy and compliance.
Business Advising requires more strategic thinking, industry knowledge and the ability to see patterns and opportunities. It’s about growth and decision-making.
Some professionals excel at both but they are different skills that require different training and experience.
Finding the Right Fit for Your Business
So what can you do?
Work with an accountant who also offers advisory services
Keep your accountant for accounting and find a separate business advisor
Look for a business advisor who works closely with accountants
The key is being clear about what you need and making sure whoever you work with can deliver. Don’t be afraid to ask direct questions.
The Bottom Line
Both accountants and business advisors play crucial roles in your business success, but they serve different purposes. Understanding this difference, as detailed above, will help you set appropriate expectations, get the right help for your specific needs and, ultimately, build a stronger, more successful business.
YOUR BUSINESS DESERVES THE BEST