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Accounting vs. Finance: What’s the Difference?

Wait a minute! I know I’ve got to track my company’s finances, but do I hire a finance person, or an accounting person? Can somebody help me out, here?!

Hey, everyone! My name is Eddy Hood, the CEO of Ignite Spot Outsourced Accounting. I get asked THIS question all the time, you’ve probably had the same question yourself. So, new entrepreneurs come to me and they say: “Should I hire somebody with an accounting background first, or somebody with a finance background first? And why?”

Well, both deal with money, right? Not exactly.

If you get this wrong, it’s kinda like… …going to the proctologist when you have a headache. Both deal with very different ends of your business. In short, here is what you need to know. The finance person is the one that deals with investments, stocks, 401Ks, all of that stuff, whilst the accountant is the one who does the day-to-day work within your business. Invoicing your customers, paying your bills, and really just telling you how your company is performing. Alright, since we are accountants here at Ignite Spot, we’re going to focus on that side of the discussion more than the finance people, but know this: Your accountant will never be prepared to help you pick the hottest stock on the market, design a portfolio, or create a 401K plan for your employees.

Yeah, that’s not us. You’re going to need both in your life, at least that’s what we’re hoping for, but you wanna get this in the right order, so think of it this way: The accountant is going to help you get money into your business, so, probably want to start with the accountant first, because you need money so that when you turn to the finance guy, you can use that money to create investments and all other sorts of portfolio things that you want to do to build your wealth.

Finance photo

You do it the other way around, it’s not going to make a lot of sense. “So, I JUST STARTED this brand new business, and I am SO excited, in fact, I just hired my very own financial planner, and it’s going to be awesome! He sat down with me, and he told me he’s gonna help me build my very own WEALTH STRATEGY!” “Hey, Gill, how you doing, old buddy, old pal? So, tell me, how much money do you have to start your new WEALTH STRATEGY?” “What do you mean? I-I don’t have any money! That’s why I hired you! I just started a business, I…

…in fact I’ve been rationing a package of ramen noodles off to my wife and kids for like four or five days!” DISCLAIMER: If you are are financial professional, I am sorry that you had to watch that. Moving on. In summary, if you need help invoicing your customers, paying your bills, and just in general knowing how your business is performing, you need an accountant.

If, on the other hand, you’ve just got gobs of money sitting around and you wanna invest it in stocks, or other businesses, or who knows what, that’s where you get the financial professionals involved. Alright, guys, that’s it I hope you had fun watching the video today, DO NOT forget to subscribe before you wander into the nethers of YouTube land, and until next time, stay profitable, and have FUN growing your business..

As found on Youtube

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