What is a Personal Accountant? (15 Things Personal Accountants Do)

What is a personal accountant? Simply put, a personal accountant is someone who can handle all your personal finance needs.

What is a Personal Accountant?

What is a personal accountant? What do they do? Find out in this article.

Who is an Accountant

This is a person who has accounting training (and most likely a college degree) and can handle bookkeeping duties.

An accountant is one who is versed in accounts. Also, an accountant is a person or officer appointed to keep the accounts of a public company.

Furthermore, an accountant is a person who has the necessary knowledge and experience to set up and maintain accurate financial records for an individual or a business. An accountant’s responsibilities may include designing and controlling record-keeping systems, auditing books, and preparing financial statements.

An accountant can provide tax advice as well as prepare tax returns.

Who is a Public Accountant?

A public accountant performs accounting or auditing services for several employees, each of whom pays the accountant a fee for the services provided. He or she does more than just bookkeeping but does not always have all of the credentials of a certified public accountant.

A certified public accountant is someone who has earned a state license that attests to a high level of skill, training, and experience. In order to qualify for the license, a candidate must have the necessary business experience, education, and moral character, in addition to passing an accounting examination. CPA is a commonly used and widely recognized abbreviation for the title Certified Public Accountant.

Must Read: How To Become ACCA-Certified Accountant In Nigeria 2022

What is a Personal Accountant?

A personal accountant is someone who manages your personal finance. They keep a check on your cash flow.

In general, a personal accountant will do your bookkeeping, help you pay bills, prepare your tax returns, and check whether your bank and credit card statements are accurate.

Why do you need a personal accountant? Most people don’t really have the time to thoroughly analyze their financial statements. And those who do, don’t necessarily know how to check for errors. That is where personal accountants come in.

Read How to: Become A Chartered Accountant Without A Degree In Accounting 2022

15 Things Personal Accountants Do

As we examine what is a personal accountant, it is imperative to understand what personal accountants do.

Here is the importance of a personal accountant:

What is a personal accountant?

1. Managing your finances

At some point, you may have wondered what is a personal accountant and if you need one. Well, you’re not legally required to have a personal accountant. However, having one makes it easier to track your money and ensure that you’re making sound financial decisions.

2. Bookkeeping

A personal accountant will keep track of your transactions, especially those involving personal finances. Utility bills, personal loans, credit cards, mortgage payments, travel expenses, and pretty much any other personal transaction fall into this category.

Some of these costs are deductible. Medical payments are a good example. As a result, you’ll need both the receipt and the bookkeeping process to demonstrate that you’re eligible for the tax deduction.

Keep in mind that your personal bookkeeper will not follow you around recording every transaction you make (of course, unless you ask them to). Instead, they’ll simply keep track of your receipts, credit cards, and bank statements.

Most will try to make your life easier by introducing you to financial software such as QuickBooks. These programs make it simpler to record and track your own transactions. The accountant will only be called in if additional analysis and statement preparation are required.

3. Handling Taxes

Filling out tax forms and filing tax returns is never enjoyable. The good news is that you can avoid all of this by hiring a personal accountant. They will prepare all of your returns and advise you on when to file to avoid penalties.

If you’ve always done your own taxes, you’re probably hesitant to delegate the task. That’s understandable if you’re working with a limited budget.

However, as your finances grow, your taxes become more complicated. The same is true for self-employed individuals and those who have multiple sources of income. A personal accountant will ensure that your returns are filed on time and that you do not pay any more taxes than necessary.

In fact, a personal accountant will ensure that you take full advantage of all deductibles available to you. For example, did you know that if you own a home, you can deduct your mortgage interest as well as your property taxes?

To qualify, you must itemize all of your deductions. Personal accountants are aware of this, and they will assist you in itemizing every expense so that you receive the maximum amount of deductions.

4. Personal Financial Advice and Planning

Have you ever gone shopping for a dress and returned with shoes as well? Or went on a “budget trip” and returned with an empty wallet/purse?

It happens to everyone, and sometimes more frequently than you might expect. Whether you’re a big spender or an impulse buyer, a personal accountant can help you break the habit and better manage your money.

First and foremost, they will explain how impulse purchases and large sums of money affect other aspects of your personal finances. Assume you go out and unintentionally spend $3,000. Your personal accountant will have to explain why you won’t be able to go on vacation the following month. Why? Because the $3,000 must be returned in some way.

In some cases, impulse purchases can jeopardize your ability to pay your most important bills, such as mortgage loans and utility bills. In such cases, a good personal accountant will help you create a daily, weekly, and monthly budget. This will limit any indulgences and prioritize your most important bills.

The accountant will prepare reports on a regular basis that explain all of your expenses while also providing financial advice. If you are in debt, they can suggest ways for you to save money each month until you have paid off the debt completely.

5. Offer Investment Advice

A personal accountant can also assist you in saving enough money to start a small business. As previously stated, they not only look for tax breaks, but they can also assist you in not overspending. When your cash reserves are sufficient, you can (again) seek the assistance of your personal accountant to invest it.

For starters, they will handle the majority of the financial planning. This includes completing all required tax forms, assisting with a business plan, evaluating loan offers, providing tax advice, and much more.

A personal accountant will help you reduce your tax bill as your company grows. For example, they may advise you to put more money into a corporate life insurance policy (rather than dividends) because it is tax-free.

Keep in mind that, according to the OECD Taxing Wages Report 2022, the average tax rate for personal income in the United States is 24%. If you earn $300,000 from your business in a year, you’ll owe at least $72,000 in taxes (which will be much higher because you’ll be in a higher tax bracket than the average of 24%).

As a result, your dividends will be no more than $228,000 at most. However, if you invest that money in a life insurance policy, you will receive the entire amount ($300,000 plus interest). You can use it to help your company grow even more. To summarize, a personal accountant will assist you in making sound business decisions.

6. Handling Inheritance

Receiving an inheritance, especially a large one, can result in exorbitant inheritance taxes. Furthermore, you may face a very high tax rate on your income and property. If you have a personal accountant, they will advise you on what to do to ensure that you only pay what is necessary.

7. Structuring Gifts and Donations

Some gifts and donations, like inheritance, are subject to taxation. The IRS mandates that any gift in excess of $15,000 (or $155,000 per year) be taxed. However, under certain conditions, you may be eligible for a tax exemption.

For example, if the gift is a property and the recipient intends to use it immediately, you may be able to avoid paying taxes entirely. These are provisions that a personal accountant can look for in order to avoid paying taxes.

Another option is to make a charitable donation from a retirement fund. It not only lowers the amount of gift tax, but it also raises the charitable value.

8. Paying Bills

According to the Bureau of Consumer Financial Protection, only 21% of Americans pay their bills on time (November 2018). It’s not always a matter of a lack of funds. Some people simply forget to pay their bills until it is too late. Others are too busy, particularly those who must make physical payments for various reasons.

The problem is that knowingly or unknowingly failing to pay a bill can harm your credit score. If you have a personal accountant, you won’t have to worry about that. If they have access to your accounts, they will either remind you to make the payment or make it on your behalf.

9. Oversee Payment Arrangements

A personal accountant will almost always work behind the scenes. For example, they will not meet with your landlord/lady to present a monthly rent check.

In some cases, however, a personal accountant will take the lead and negotiate payment arrangements on your behalf. They can bargain with sellers to get you a better deal.

Similarly, your accountant can negotiate a payment plan with creditors, the IRS, credit card companies, and even banks on your behalf. After all, the accountant is familiar with your financial situation and will be objective when negotiating.

10. Recommend Other Professionals

If you have a problem that isn’t necessarily within their scope, a personal accountant can recommend a qualified professional to assist you. The majority of them have close relationships with people in similar industries. Thus, if you require the services of an insurer, banker, lawyer, money manager, investor, or other professional, the first person to contact should be your personal accountant. They will locate the appropriate person to address the issue.

11. Checking the Legality of Transactions

Finally, and perhaps most importantly, a personal accountant examines financial records for accuracy and legal compliance. If you fill out a form incorrectly, such as a tax form, the best case scenario is that you file an amended return with the IRS.

What is the worst-case scenario? You will face tax evasion charges. This is possible if the IRS conducts a tax audit and discovers that you withheld material information. The IRS defines tax evasion as a felony punishable by fines, imprisonment, or both.

Personal accountants, fortunately, typically review transactions as well as documents to ensure that you are fully compliant. As a result, that should be a huge weight off your shoulders.

12. They aid in the assessment of business performance.

Your economic records detail your company’s financial situation as well as its operational results. A personal accountant helps you better understand your company’s financial situation.

Clean and up-to-date records will not only allow you to keep track of expenses, gross margins, and potential debt, but will also allow you to distinguish recent data from previous records and allocate your budget accordingly.

13. Help With Retirement Planning

A financial advisor can help you plan for retirement and withdrawals. They can help you reduce the possibility of running out of money by assisting you in managing your sequence of returns risk. By determining an appropriate withdrawal rate, your accountant can manage the risks of low returns in a portfolio.

14. Contributes to the Growth of Your Professional Image

Having a personal accountant adds a professional touch to the success of an entrepreneur.

When other professionals and companies approach people about financial difficulties rather than calling your line, they are seen as more respectable.

An accountant’s promptness and organization can also help you improve your reputation.

15. You’ll have a better chance of being approved for a loan.

Banks and financial institutions frequently require extensive financial calculations before sanctioning a loan. A personal accountant can help you prepare and organize this information before applying for a loan, greatly increasing your chances of acceptance.

Accountants play an important role in assisting clients in estimating their needs and communicating the loan’s goal to the bank. They can also help their clients figure out how to qualify for a mortgage with passive income.

Can You Be Your Own Personal Accountant?

You can, of course, be your own accountant. It is not difficult to keep track of your income and expenses. It requires no accounting knowledge to complete successfully. In fact, accounting software such as QuickBooks for small businesses and Wave Accounting for individuals and freelancers will provide you with a complete picture of your income, expenses, and what you can do to improve your financial situation.

If you cannot afford a personal accountant, going the Do it yourself route is a great option. However, it will take more time and effort. You’ll also have to deal with the time-consuming task of filing your own tax returns.

Consult a certified public accountant (CPA) at the very least, and ask how you can maximize your deductibles to get a bigger tax break.

Personal Accountant Vs. Financial Advisor: What’s The Difference?

It’s important to note that a personal accountant is not the same as a financial advisor; many people confuse accountants with financial advisors. Financial advisors, also known as financial planners, specialize in three areas: budgeting, debt management, and investing.

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While an accountant can assist you with handling bills, filing tax returns, bookkeeping, and other tasks, a financial advisor will solely assist you with financial planning. As a result, if you want to save for something (college, a home, a car, etc.), plan for retirement, do insurance planning, create a budget, get out of debt, invest your money, or plan your estate, you should consult a financial planner.


Many people are hesitant to hire a personal accountant or financial advisor. I understand because most service providers charge so much money that it is not even worthwhile to use their services.

The same could be said for a personal accountant. Just keep in mind that you could use their service for a few months and get educated on how they can help you manage your finances before letting them go; in the end, it’s all up to you.

I hope you enjoyed the article. And that you now know what is a Personal Accountant? Don’t forget to share it with anyone who might be considering hiring his own personal accountant.


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