Have you ever worked with an accountant that didn’t advise you in the way you needed? Maybe your bookkeeper can’t seem to help you with your business strategy, or your tax accountant doesn’t really ‘get’ your business.
Here’s the thing: not all accountants are created equal. Tax, accounting, bookkeeping, and financial strategy are all different aspects of your business finances. Each of them has different a focus and require different skill sets. Typically, different professionals will guide you in each of these areas. Think of it like this: a wedding designer doesn’t do the same thing as a wedding planner – even though there can be crossover in their areas of expertise.
3 Types of Financial Professionals
The Tax Accountant
Every business needs a tax accountant. When hiring a tax accountant, keep in mind:
- You don’t need a wedding or creative business tax expert. A small business is a small business. And, the tax forms don’t differ much from one to the next.
- You do need someone smart and reputable. And, it’s worth paying extra for a tax accountant who is on top of things.
- They may or may not have a CPA – certified public accountant – license.
Tax is their specialty. A tax accountant is usually not the best suited for your overall financial strategy because they are focused on the nuances of tax code (which is VERY complex). Lastly, YOU need to be proactive with your tax strategy. As your business changes, YOU need to let your tax accountant know so that they can help save you money on taxes. Far too many business owners are waiting for tax accountants to take the lead. When you have changes, give them a heads up. When your business is doing well (you’re making good money) let them know. If you’re facing some significant losses, let them know. I recommend sitting down with your tax accountant each Fall to have these big talks. If you wait till the new year they will probably have a less available schedule as they prepare for tax season.
The Bookkeeper
You may get to a stage in your business where you need a bookkeeper because you are spending too much time recording things in Quickbooks. Here is what a bookkeeper does:
- A bookkeeper manages your accounting transactions. They’re typically working with Quickbooks to get all of your information updated on a daily, weekly, or monthly basis.
- Most bookkeepers aren’t there to tell you how to earn better in your business. They are your DETAIL gal (or guy). Utilize this skillset. Your books will be tight – and your reports will tell you exactly how well you’re doing.
- You may assign these tasks to a staff person. Make sure they are well trained.
Too many accounting errors happen by under-qualified in-office staff managing Quickbooks. Bookkeeping can easily be outsourced. A good thing to keep in mind is even if you have a bookkeeper, you are still the CEO of your company. You still need to know what your money is doing. They’re only counting the pennies, not deciding what to do with them.
The Financial Strategist
A financial strategist or consultant is similar to a CFO-for-Hire. I may be biased because this is what I do, but this is the most exciting role in your financial team. Here is what a financial strategist does:
- Works with you to create financial goals and coaches you on how to realize them. · Creates sales projections and expense budgets, with the help of a cash flow strategy.
- Helps you make intentional decisions with your dollars.
- A financial strategist is focused on the big picture of your company. They’ll help you incorporate the numbers into your over-arching business strategy.
Ultimately, you will still decide what to do with your money, but a financial strategist (or CFO-for-hire) will help you navigate how to do so. What if my accountant does all three? You may work with a firm that offers all three of these experts in-house. This presents a perfect opportunity to work with a trusted organization to guide your business. Or, you may find that your tax accountant also offers bookkeeping. Use the above guidelines to ensure that this professional is adept at both skillsets. The last thing to keep in mind is pay scale. There may be tax accountants that also offer bookkeeping. Because tax accounting strategy is more labor intensive, and requires deeper experience and education, the pay rate is generally higher ($$$) than that of bookkeeping which is typically more entry level ($$). It may not pay to have someone on a high pay grade doing an entry-level job for you.
Does your wedding business need all three of these accountants? Nope, not necessarily. You’ll want a tax accountant. If your bookkeeping becomes too unwieldy and you have money to invest in this, a bookkeeping firm can be a great next step. And, if you’re looking to shift your business financially (to earn more, or make some significant changes) a financial strategist can help get you there.
Michelle Loretta is a business consultant and financial strategist for wedding and event professionals. As founder of Sage Wedding Pros she blends her past as an accountant for Deloitte, a sales and marketing manager for DDLA, a merchandiser for Coach, and a stationery entrepreneur to strengthen wedding businesses worldwide. Sage Wedding Pros is best known for Be Sage Conference, a summit for master-level wedding professionals. Michelle has been asked to speak at a number of industry conferences, including NACE Experience, Biz Bash Live, and The Special Event.