An illustration of a small business accountant with a yellow blazer and long black hair, shown balancing icons that represent business financials, tax filings, and business growth.

Small business accountants: What they do + why they’re important

Many small business owners spend countless hours every week creating financial reports and managing their books, and many feel like there are few results to show for it. As many of us know, the process of trying to do small business finances yourself can be frustrating and time-consuming.

The best way to avoid this frustration is to add a small business accountant to your team. A good accountant can help you with your books and free up your time to be used in other areas of your business.

And while many small businesses think they can’t afford the expense, the fact is that the return on investment in hiring an accountant far outweighs the cost.

Here’s why small business owners should partner with an accounting professional to grow their business.

What does an accountant do for small businesses?

Four tasks a small business accountant can help business owners with: getting your business set up (including choosing an entity and starting tax preparation, providing you with expert assistance and a second set of eyes, keeping you compliant with current tax laws, and preparing you for an audit.

Accountants do a lot of heavy lifting when it comes to keeping your business financials in line. In addition to helping you during tax season, they can help you get your business set up, keep it up to date on tax laws, help prepare for audit compliance, and give you advice along the way.

Get your business properly set up 

If you’re just starting a business, you might be asking yourself questions like:

  • What type of business entity is the best for my situation?
  • How should I go about hiring employees?
  • Do I have to pay sales tax or state income taxes, along with federal income taxes?

These are all questions an accountant can help you answer. They can set you up with the business structure that best protects your assets and gives you the most tax advantages. Your accountant can also set up your financial software, income and expense categories, and provide you with a business budget to operate at your best.

Provide expert advice and assistance 

For many people, dealing with numbers all day can be tedious and sometimes confusing. An experienced accountant can provide much-needed strategic advice and insight about the ins and outs of your small business, such as:

  • Determining the best business structure
  • Analyzing your financial plan
  • Monitoring your cash flow health

Having another pair of eyes to review your books and make sure everything is correct can go a long way. An accountant can ensure you’re spending money where it counts and that you’re not being double-billed for anything.

QuickBooks has the tools you need to help your business thrive.

Keep your business up to date on tax laws 

Staying up to date on never-ending tax law changes and business regulations is a full-time job in and of itself. So even if you’re a budget-conscious business owner, there’s undeniable value in partnering with an accounting professional to make sure you:

  • Stay compliant
  • Find new deductions
  • Keep your financials accurate

A big part of an accountant’s job is to stay educated on all of the nuanced tax changes and business regulations. This attention to detail will help you get the tax deductions and credits you deserve.

Prepare your business for audit compliance

Having an accountant on your team is especially important in the event of an IRS audit. They will be able to:

  • Prepare you for the process
  • Suggest best practices for recordkeeping
  • Walk you through an audit

Your accountant will be a trusted advisor who has your business’s best interests at heart. They will work on your behalf during an audit situation by being an authoritative representative in dealings with the IRS.

Your accountant knows that if you’re successful, then they’re successful, too.

4 benefits of having an accountant for your small business

An accountant helps small business owners by giving them more time to delegate, allowing them to focus on growth, helping them reduce their tax bill, and limiting costly accounting errors.

When you’re the boss, you always want the best for your business. Sometimes, this means you end up focusing too much of your time on day-to-day operations while bigger picture tasks fall behind.

The benefits of having an accountant for your small business center around giving you the time to devote your best self to your business’s future. An accountant can give you the time to delegate smaller tasks, find growth opportunities, lower your tax bill, and even limit costly accounting mistakes.

1. Delegate and focus on the big picture

Your time is better spent working toward big business goals and securing clients, customers, or new business, not daily bookkeeping or admin tasks. You care more about running your business and boosting your bottom line, which is likely why you started it in the first place.

Finding the right accountant lets you get back to focusing on your business. That means less time spent balancing your books, inputting data, and dealing with daily transactions, so more time can be devoted to growing your business and turning it into a thriving success. An accountant can help you better utilize your time while making you feel comfortable about the day-to-day finances.

2. Look for new growth opportunities 

An accountant can help you determine areas within your business that are primed for growth by reviewing your cash flow patterns. They can also optimize your inventory, pricing, and any business financing you may need.

All of these things will help you focus on the growth aspects of your business instead of getting tied down by the minutiae of admin tasks.

3. Reduce your total tax bill

It’s no secret that businesses incur many expenses, like contracted labor, employee salaries, and quarterly tax payments. This not only includes federal and state taxes, but also sales taxes, which can quickly become complicated.

An accountant will be able to accurately estimate your quarterly taxes and help file monthly payroll taxes on your behalf. They can also advise you on the best methods for complying with sales tax regulations in the markets you sell to.

An accountant’s expert advice can reduce your tax bill and save you money on additional penalties and fees for underpayment.

4. Limit expensive accounting mistakes 

Day-to-day mistakes in a small business can cost a lot of money. Likewise, accounting or tax mistakes can be even more costly.

An accounting error can range from something small, like not being able to make your checking account balance with your books, to something bigger, like not filing and paying your estimated taxes. Even worse, you can get into financial trouble by mismanaging your cash flow, which is a common and costly pitfall for many small businesses.

There are errors and omissions that can be even more expensive, such as missing out on important tax deductions and credits. This can greatly affect your bottom line and mistakenly force you into paying more money to the IRS than is necessary.

You deserve to keep more of your hard-earned money, and this means ensuring you don’t incur expensive accounting mistakes.

When to hire a small business accountant

A list showing different times when a small business accountant is helpful to business owners: When you write a business plan, choose a business structure, apply for a small business loan, get your finances in check, grow your business, buy a new business, obtain a franchise, work on your tax compliance, deal with an audit, or choose to close or sell your business.

An accountant can make life as a small business owner less stressful. There’s no wrong time to bring one on board, but figuring out when to hire a small business accountant based on your business and budget takes planning. Some businesses only need an accountant for a few hours at a time, while others benefit from keeping a full-time accountant staffed or on retainer.

Here’s a list of a few important times when a small business accountant may come in handy:

  • Writing a business plan: An accountant can use financial projections to give important context to your plan.
  • Choosing a business structure: An accountant can help you decide which structure fits your needs and goals.
  • Applying for a small business loan: In addition to helping build your case in your application, an accountant can help choose a loan with favorable terms.
  • Getting your finances in check: An accountant can measure metrics like receivables and payroll to keep your cash flow in line with your goals.
  • Growing your business: Hiring employees, growing your office footprint, and scaling your business responsibly are all things an accountant can help with.
  • Buying a business or franchise: An accountant can help you make sure your purchase is a sound financial decision by evaluating the business in question.
  • Working on compliance: When you need to deal with the government, a good accountant can make sure you’re not missing important information.
  • Dealing with an audit: In the event your small business is audited, an accountant can advise you on navigating the process.
  • Selling your business: If the time comes for you to offload your business, an accountant can make sure you have a quality presentation for buyers.

Put more focus on your business: Hire a small business accountant today

Don’t underestimate the importance of having an accountant on your team. If you don’t already have one, start your search with QuickBooks, which can help you find a qualified accounting professional who’s right for your business.

You’ll be thankful to have an advocate on your side who can allow you to focus on what you do best and help reduce stress and uncertainty. The return on investment far outweighs the cost of hiring one.

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