Discover more in the Best of OPEN Forum series

What You Might Expect From Your Accountant

A CPA may be able to offer critical services beyond filing tax returns.
January 18, 2016

Don’t wait for tax season to reach out to tax professionals. The right accountant for your small business could have more tools than just filing taxes in their arsenal. While important, tax preparation alone may not help your company grow.

Norm Brodsky writes in Inc. that accountants may leave financial management services on the proverbial table—to the owner’s peril. You may need strategic financial planning services, and accountants are often in a prime position to fill it.

Small Business Administration survey found that out of the new businesses that receive so-called “mentoring” services, 70 percent stay in business at least five years. If accountants can expand their services to include the financial consulting or “mentoring” services, the small-business community might see a seismic shift.

Why are a large percentage of owners not demanding this financial consulting or strategic planning assistance? One reason may be that owners who were strong in the concept development phase are unprepared for operations and financial management of their businesses. Finances and operations can be intimidating, but there's no shame in being a financial novice. Large corporations often pay hefty sums to their chief financial officers who have advanced degrees to help effectively navigate financial waters. Why shouldn't you get similar counsel for your business? You don’t need to be an expert, but having both a basic level of financial acumen and a knowledgeable financial mentor to help you grow your business may make a difference.

Accordingly, there are three areas I've titled Financial Zones of Services that every business owner should request:

Zone 1: Financial Education

An accountant ideally might explain your business to you, by the numbers. Your provider may give you a comprehensive understanding of your business from the financial perspective, including the history of your business for a particular period; i.e., how much money came in and how much went out. You’ll likely want that story or summary to be consistent with your day-to-day experiences inside your business. Also, every financial document prepared provides a different snapshot of your business. I consider it the business owner’s responsibility to ask until you understand, and I consider it an accountant’s responsibility to communicate clearly and be patient until you do.

Large corporations often pay hefty sums to their chief financial officers who have advanced degrees to help effectively navigate financial waters. Why shouldn't you get similar counsel for your business?

Zone 2: Financial Projections and Strategy

Some argue that accountants aren't trained to provide projections and growth strategies because they only explain what happened in the past. However, someone who knows where you've been and how you got there may have the potential to offer invaluable insight. Thad said, it may take some research to find the right accounting firm. Many are starting to add financial consultants to their office with this area of specialized knowledge. Specifically, this role may require a firm or an individual who understands your market, your operations and your projections on revenue as well as expenses. Finding an accountant with this area of expertise may not be easy or cheap, but it may have the potential to mean the difference between reaching your five-year mark, or filing for bankruptcy. 

Zone 3: Financial Protection

The traditional role of the accountant involves protecting you from excessive tax liability. But, in the era of computerized competition for these services, when many business owners can do basic taxes on their own, an accountant may be well-served by thinking more broadly. In fact, if you haven’t done so already, I’d encourage small-business owners to sit through an online tax prep session. Understanding the basics (deductions, expenses and health insurance premiums) may make for better communication between you and your accountant. With that fundamental tax knowledge, you and your accountant might be able to spend more time on strategic and financial planning such as tax savings, cash flow knowledge, the seasonality of your business, payroll matters and profit projections.

Adhering to this holistic approach to financial health, you should consider requiring your accountants or business consultants to provide you with the necessary services that will promote the growth, stability and protection of your small business.


For more tips on how to help ease your way through tax season, access our exclusive guide, It’s Tax Time: A Business Owner’s Survival Guide.


Read more articles on accounting.

This article was originally published on January 26, 2015.

Photo: iStockphoto