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Should I Hire an Accountant for Small Business as an Advisor?

October 16, 2020
Insights from the Gerard School of Business

Small business owners are used to wearing many hats. They are marketers, strategists, hiring managers, and product creators all rolled into one. What they are not, in most cases, are accountants. In today’s fast-moving entrepreneurial business world, accountants do more than balance the ledger and offer tax advice. In the best of circumstances, they are trusted business partners.

Five out of six small business owners consider their accountant to be “a trusted advisor they can turn to for a wide range of business advice,” according to an article in CPA Practice Advisor.

Digging a little deeper into the statistics, while 86 percent of small business owners see their accountants as trusted advisors, only 53 percent strongly agree. What can we learn from this 33 percent gap?

It’s a matter of trust.

The Role of an Accountant for Small Businesses

The role of an accountant has always been centered on trust. Without trust, an accountant can’t fully serve their clients. After all, their job is to watch the money.

Today, they still keep an eye out for the money, but the skill set of the modern accountant for small businesses has evolved. Technology has revolutionized accounting and the array of services accountants can offer their clients.

Beyond the important traditional tasks accountants provide, small business owners demand a more comprehensive relationship with partners they trust. It’s a natural fit for accountants.

How Accountants Can Be Advisors for Small Businesses

It is important for entrepreneurs to understand their strengths and weaknesses. An article in Strategic Advisor cites internal survey data from small business owners showing financial and business planning as an area of weakness.

The unique skill set of a small business accountant can fill this gap, allowing the accountant to help the business owner navigate every phase of the small business venture.

As a start-up, some of the things your trusted accountant can help you with include:

  • Determine the best business structure for your business
  • Assist with the financials in your business plan
  • Set up bank accounts and record-keeping
  • Ensure financial regulatory compliance

Once the business is up and running, accountants can assist with many regular business operations including:

  • Company payroll and processing
  • Advising on quarterly estimated tax payments
  • Explaining financial statements and offering strategic advice
  • Managing costs and balancing budgets
  • Preparing annual taxes, preparing year-end reports, overseeing W2 and 1099 forms, and maintaining all paperwork required by the IRS

As your business grows, your accountant can further help to:

  • Strategically analyze prime areas for business growth
  • Secure business financing
  • Prepare financial forecasts
  • Prevent you from being audited, and guide you through one should it occur

Business and Technology

Many industries these days stand transformed by the “disruption” of technology and new business models. It may seem counter-intuitive, but the staid profession of accounting was among the first on the disruption bandwagon.

Since the advent of VisiCalc in the 1970s, accountants have been at the forefront of business technology adaptation. Automation, cloud computing, and machine learning are all areas with which modern, tech-savvy accountants are familiar.

For small business owners, this is a good thing. In fact, as accountants for small businesses become trusted partners, business owners increasingly ask for technology advice from their accountants.

An article in Small Business Trends reports on a study by Zoho and AccountingWeb showing that 40 percent of accountants surveyed get at least 20 questions every month from their clients about technology. Clients ask accountants about desktop accounting software, software training, support services like cloud computing, and data security.

“One of the most important factors when seeking expert advice is trust,” says AccountingWeb’s Andy North in the article. “Hopefully, the accounting partner has already earned that trust, so it’s a smaller step to ask for advice about technology.”

North brings the matter of trust full circle.

Your Accountant as a Small Business Advisor

Successful partnerships are built on trust. From strategic analysis to technology support, accountants who have earned the trust of their clients are in a unique position to provide them with a diverse range of services.

An Master of Science in Accounting degree can help take your skills to the level of trusted advisor. Merrimack College has created an MS program in cooperation with industry professionals that is aligned with what today’s employers are looking for. Graduates leave      prepared with the skills needed to become accounting leaders capable of helping small business owners make the important financial decisions that result in success.