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 between an Accountant and a Finance Director?

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 
• Monthly Accounts with analysis 
• Cash flow monitoring and forecasting 
• Structures and Support in the Finance Department 
• Support when evaluating Business Decisions 
• On-site with you weekly or monthly whatever is needed 
• Fresh perspective 

When Do You Need an Accountant? 

Throughout the life-cycle 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 record-keeping will all be essential to the success of your business. And if you’re too busy to handle it all on your own, delegating to a qualified Accountant will free up time to work on your business. 

When Do You Need a Finance Director? 

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

When you need 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 probably continue to need an Accountant, even when you have a Finance Director. 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, as we have seen, the roles are different. 

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

Today, many business owners are turning to outsourced Accountants and Finance Director services to help support their business. This provides access to expert advice and guidance and at a fraction of the cost. 

To find out more about our FD services, please get in touch with EFM. Our team of EFM Experts can help to support your business with effective financial management and growth techniques.