Do I need an accountant, a Finance Director, or both?

Spoiler alert:If you’re already debating the need for a Finance Director, you definitely need both.

There is often confusion when discussing the roles of accountants and Finance Directors. After all, they both work with clients and businesses to help improve their financial outlook. However, there are some key differences when it comes to how they go about achieving this.

Typically, accountants will handle financial records and reporting, and ensure their clients remain compliant and up-to-date with tax. Finance Directors, on the other hand, take a more holistic role, overseeing every financial aspect of the business and offering insight to guide important high-level decisions.

What’s the difference? In a nutshell…

An accountant will:

  • Maintain profit and loss records
  • Ensure your business remains compliant with financial regulations and tax
  • Check the accuracy of important financial documents
  • Help you plan your business, identify and assess costs, and structure accordingly

A Finance Director will:

  • Monitor the financial health and well-being of your business
  • Offer financial insight and guidance on all company decisions and issues
  • Provide back-office functions such as managing accounts ledgers, depending on your needs
  • Create budgets and forecasts
  • Pinpoint problem spending by highlighting trends in the market

When Do You Need an Accountant?

Throughout the lifecycle of your business, you will almost certainly require the services of an accountant at several key stages.

Starting up requires careful business planning and structuring, something an accountant can help you accomplish. Going forward, tax, compliance, and financial recordkeeping will all be vitally important to the success of your business. And if you’re too busy to handle it all on your own, delegating to an accountant will free up time to work on your business.

When Do You Need an FD?

The need for a Finance Director will often come later, as your business scales and becomes more successful. A good FD should be able to provide information and advice that an accountant cannot. This advice should help you make important decisions to drive your business forward.

When you find yourself wanting (or needing) to delegate key leadership tasks, such as external negotiations, pricing models, budgets and forecasts, that’s typically the moment to turn to an experienced Finance Director for help.

When Do You Need Both?

You will need both an accountant and a Finance Director from the moment you need the latter. Just because your business is “graduating” to the level of requiring an FD to oversee future financial performance does not negate the need for an accountant.

With that in mind, it’s crucial that you delegate and separate certain financial duties, so to ensure confidence and create accountability. For instance, if someone within your financial department is responsible for paying the bills, they shouldn’t also be responsible for reconciling the bank account.

Checks and balances are vital, and this is something a Finance Director can help you implement.

Some Final Thoughts

For many growing businesses, hiring in-house for both key positions can be challenging. But in order to be successful, you will need both an accountant and a Finance Director in place to continue on the right path.

That’s why so many are turning to outsourced accounting services and virtual Finance Directors. This provides access to expert advice and guidance, and at a fraction of the cost.

If you’d like to learn more about hiring a virtual FD, contact us today and arrange a discovery call.

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