Choosing the Right Financial Professional for Your Small Business

When you’re ready to get help with your business finances, the first professionals that might come to mind are bookkeepers or CPAs. However, not all financial professionals are equipped to provide the specific insights and services your business needs. It’s crucial to understand what kind of support you’re looking for to ensure you find the right expert.

 

Preparer vs. Strategist

First, determine whether you need a preparer or a strategist. Preparers are great for generating the necessary reports and data—think tax preparers who organize your financials annually. Strategists, on the other hand, help plan your financial future, offering guidance on how to reduce taxes and maximize profits based on your business goals. Not every business is ready for a strategist, but if you’re looking to be proactive about your finances, this could be the right choice.

 

Proactive vs. Reactive

Consider whether your approach to financial management is proactive or reactive. Many businesses operate reactively, adjusting as money comes in and goes out. This can lead to uncertainty about financial stability and decision-making. A proactive approach involves strategic planning and forecasting, smoothing out financial variability and giving you more control over your business’s financial future. While a bookkeeper might react to transactions, a CFO will plan for what’s coming, helping you stay ahead.

 

Specialist vs. Generalist

Do you need a specialist or a generalist? Specialists focus narrowly, offering deep expertise in areas like tax accounting or compliance. Generalists, such as many CPAs, can handle a broader range of financial tasks from tax preparation to bookkeeping and forecasting. While a generalist might seem convenient as a one-stop shop, specialists bring detailed knowledge and focused strategy that can be critical for complex issues.

 

Project-Based vs. Ongoing Support

Decide if you need temporary project-based help or ongoing support. Project-based professionals can assist with specific tasks like preparing financial statements for a loan application. If you’re seeking a partner to help steer your business strategy regularly, you’ll want someone for ongoing support who can provide continuous insights and adjustments.

 

Education vs. Reports

Lastly, evaluate your need for education versus straightforward reporting. Understanding the basics of your financial reports is crucial—even if you’re not a financial expert, knowing enough to make informed decisions is essential. If you find you’re receiving reports without understanding them, it might be time to prioritize financial education to better manage your business.

 

Here is the typical breakdown for some common financial experts (may vary by firm)

CPAs: Strategist, proactive, generalist, reports, project based

CFOs: Strategist, proactive, specialist, reports, ongoing

Bookkeepers: Preparers, reactive, specialist, reports, ongoing

Tax accountants: Preparers, reactive, specialists, reports, project based

Financial Advisors/Financial Planners: Strategist, proactive, specialist, reports, ongoing

Financial Educators: Strategist, proactive, specialists, education, project based

 

At Powerful People Plan, we understand the importance of both financial education and expert support. Our Academy is designed to empower you with the knowledge to manage your business finances effectively and to help you identify the right kind of financial support you need. We have CPAs, CFPs, and Financial Educators waiting to support you.

 

Before hiring your next financial professional, understand the financial professional distinctions and consider what skills you need to develop to take full control of your business finances. Learn more here.