The Efficacy of Personal and Business Financial Tracking Tools for Financial Advisers
Managing personal and business finances can be complex, especially for financial advisers. This article aims to delve into the tools and methods used by financial professionals to keep their finances in check. From popular software solutions to the support of certified professionals, we explore how financial advisers use a combination of tools to ensure financial stability and growth.
Combining Digital and Professional Support
As a Certified Financial Planner (CFP) myself, I rely on a variety of tools and professional partnerships to manage my finances efficiently. I have found that using a combination of digital tools and professional expertise has been the most effective way to track and analyze my financial data.
Quicken: Personal Financial Management
I use Quicken, which uses Crossover for Mac by Codeweavers, to track my household cash flow. This software allows me to monitor my personal spending and saving activities on a daily basis. One of the benefits of using Crossover for Mac is that it provides the functionality of Windows applications on a Mac without the need to purchase a Windows license, switch to a virtual machine, or reboot.
QuickBooks Online: Business Financial Management
For my business, I use QuickBooks Online, which is a more advanced accounting software that supports two S Corporations. This tool not only tracks my business expenses and income but also helps in maintaining accurate records for tax purposes. QuickBooks Online is particularly useful for handling the financial aspects of running multiple corporations and providing detailed financial reports.
Professional Support Through CPAs and CFPs
My Certified Public Accountant (CPA) has read access to my QuickBooks Online account. This allows him to prepare tax returns, administer payroll, estimate tax liability, and other necessary tasks without my intervention. My CPA is also responsible for filing personal tax returns for our household, a task which I could handle myself but choose not to do due to the convenience and time efficiency.
Additionally, I engage a Certified Financial Planner (CFP) to provide strategic advice on managing my free cash flow, maximizing insurance, tax, and estate planning opportunities, and outlining an appropriate savings and investment strategy that aligns with my household's goals and objectives. I pay an hourly fee for these consultations, which I believe is worth the investment for the professional advice and guidance.
Leaning on Expertise: Financial Planning Classes and Enrolled Agents
Like many financial professionals, I often find myself lecturing in financial planning classes or providing education on income tax matters. I recently paired with an Enrolled Agent (EA) who is also a CFP to handle my personal tax returns. Another EA takes care of our partnership returns. The rationale behind this is that there is a wealth of knowledge in both tax and financial planning, and dedicating the time to become an expert in everything would not be the most efficient use of my time. Instead, leveraging the expertise of professionals in relevant areas is a better strategy.
Conclusion
For financial advisers, using a combination of financial tracking tools and professional support has proven to be an effective way to manage personal and business finances. Software like Quicken and QuickBooks Online provide the necessary tools to maintain accurate records, while CPAs and CFPs offer invaluable guidance and assistance in tax, personal financial management, and strategic planning.
Financial professionals should leverage the strengths of these tools and experts to ensure they can focus on growing their businesses and serving their clients with the best possible advice. Life is indeed too short to master everything, and collaborating with qualified professionals can be both time- and cost-effective.
Key Takeaways:
Using a combination of digital tools and professional support is essential for financial advisers. Selecting the right financial planning software (like Quicken and QuickBooks Online) based on personal and business needs can simplify financial management. Engaging certified professionals (such as CPAs and CFPs) can provide valuable expertise in specific areas like tax preparation, financial planning, and estate planning.