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Handling Business Taxes: Can Business Financial Advisors Give Tax Advice?

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Business financial advisors play a vital role in building and preserving the wealth of entrepreneurs like you

March 13, 2024
Author: NCH

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These professionals can advise you on financial topics like saving, investing, and estate planning. They can also offer unbiased opinions on your financial management strategies.

But what about taxes? Can financial advisors give you tax advice, or is it best to consult a tax advisor for your tax preparation needs?

If you’re wondering whether financial advisors can give you tax tips, you’ve come to the right place. 

In this blog, we’ll discuss the responsibilities of a business financial advisor and what makes them different from a tax advisor. We’ll also explore the important factors you must consider when deciding between a financial and a tax advisor. 

Read on to learn about the many roles of a business financial advisor. 

The Many Roles of A Business Financial Advisor

There are several ways financial advisors help business owners maintain and manage the financial health of their enterprise, such as:

Insurance Planning

Business risks are difficult to avoid. So, to mitigate some of these threats, most entrepreneurs will seek the help of a financial advisor to plan their insurance policies. 

They will assist you in getting general liability policies that cover common risks such as injury, property damage, and other similar lawsuits. Aside from this, a financial advisor can also help you find specific premiums for life, disability, and key person insurance. 

Cash flow Management

One of the more important roles of a business financial advisor is to help clients manage their cash flow. 

As your business grows, you must start thinking about its future. Can your current cash flow support your business during slow seasons? Can it fund any expansion plans you have in mind?

These are some of the more important questions that your business financial advisor can answer. They will help you analyze the current financial health of your business and collaborate with you in developing a robust strategy for cash flow management. 

Remember, effective cash flow management doesn’t end with addressing the immediate financial needs of your business. It should also allow you to foster long-term growth and sustainability. 

Managing investments

If your business has multiple investments, you’ve probably lost track of some of them. While it’s true that investing some of your unused funds in certain assets is a great idea, incurring capital losses could still put your business at risk. 

So, instead of letting your investments stay in low-returning assets, your business financial advisor will help you find more profitable investments that could increase your business’s profitability. 

Succession planning

Succession planning is the key to protecting the legacy of your business. Should you or one of your partners decide to leave the company, you must have a well-thought-out succession plan, ensuring the seamless transfer of ownership. 

A business financial advisor should be able to guide you in creating and executing a comprehensive succession plan. Despite what most people think, succession plans are not just a contingency measure. It’s an important tool for guaranteeing the longevity and sustainability of your business. 

Can Business Financial Advisors Give Tax Advice?

Since taxes influence a business’s financial health, can you ask a financial advisor for tax advice? The short answer is it depends. 


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While it’s true that financial advisors primarily deal with various areas of financial planning, not all of them have a background in tax planning and resolution. 

Before a financial advisor can start offering tax consultation services, they must get certifications from the American Institute of CPAs and the National Association of Certified Public Bookkeepers.

Moreover, most financial advisors helping business owners manage their taxes become tax return preparers or IRS-enrolled agents.

Financial Advisor vs. Tax Advisor: What’s The Difference?

Unlike financial advisors, who focus on all things finance, the job of tax advisors stays within the realm of taxes. 

The main goal of a tax advisor is to help business owners like you solve issues like tax liens, filing errors, and penalties. These experts were trained to reduce tax liabilities and ensure tax compliance. 

With their help, you can improve your company’s tax efficiency and, ultimately, its financial health. 

Choosing Between A Tax Advisor & A Financial Advisor

Although the roles of a tax advisor and a financial advisor are vastly different, they’re highly interrelated. Together, they can help you create a comprehensive approach to improving your business’s financial health. 

But what if you can’t hire both of them simultaneously? If you’re deciding between hiring a tax advisor or a financial advisor, one important factor you must consider is your needs. 

A financial advisor can give you tips on investing and mitigating risks, but they won’t have the in-depth tax knowledge you may need for tax resolution. 

If the primary issue you want to solve for now is your late tax filings, it is best to look for a tax advisor. However, a business financial advisor is the right expert if you’re more interested in solidifying your cash flow or improving your business’s investment strategies. 

Despite their differences, the expertise that both financial and tax advisors bring to the table is indispensable. Choosing between the two of them highly depends on what your priorities are. 

Find An Experienced Tax Advisor Today

If you’re already working with a financial advisor but need a tax expert, look no further than NCH. 

NCH’s tax advisors are here to give you tips on solving tax issues and reducing your tax liabilities. With years of experience in the field, our tax advisors understand that no business is the same. 

They will work with you to develop strategies tailored to your business’s specific needs and goals. With NCH, you can guarantee that your business will be tax-compliant and efficient. 

To learn more about our tax advisors, visit our website here or call us at 1-800-508-1729.

Disclaimer: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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