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Should Accountants be required to be certified financial planners?

Accountants often fall into the activity of giving business owners advice on how to report their financial statements.   In many instances,  Accountants automatically will try to report the financial statements for their clients with as little net income as possible.    However, is there a case to be made that Accountants be required to be certified financial planners?

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There are reasons Accountants should have knowledge of both financial planning and business credit to assist them in their conversations with clients.    Accountants may automatically take as many deductions for their clients as possible and show the clients net income as low as possible, sometimes close to $0.   This may happen without having conversations with their clients about whether this is in the best interest of the client in the short and medium term.

Accountants and many of their business clients may think the Accountant is doing the best job possible if the Accountant shows the net income of the business as close to $0 as possible.  This type of reporting may occur for several years without any substantive conversation between the Accountant and the business owner.

In many cases, the Accountant is not considering whether their business clients will have financing needs in the following two to three years.   If the business will have financing needs, it is important for the Accountant to be aware of this and discuss with the owner of the business the importance in the credit review process of showing a healthy net income.   In many cases, the business owner will not be aware themselves of this issue, especially the owners of newer businesses.

Financial statements can be reported differently by Accountants in many cases by reporting officer’s salaries, amortization and depreciation differently.   There are also other items that can be carried over into future reporting years.  Different figures will result in a different net income reporting.  Accountants should have a strong or almost expert knowledge of the credit issues already, since they likely will have done the financials of many businesses.    The onus should really be on the Accountant to advise, or at least make their business clients aware of the significant drawbacks credit wise, if the reported figures for net income is too low.