When you’re ready to grow your business, bringing in some outside expertise for your finances can be a wise move. Certified Public Accountants (CPAs) aren’t just good with numbers—they know how to turn those numbers into actionable insights.
An experienced accountant has worked with dozens (possibly hundreds!) of small businesses. So they usually have helpful advice for making a plan to steer your growth.
Assuming you’ve already found an accountant you want to work with, what questions should you ask? We cover the top questions to ask an accountant to arm you with the info you need to make better business decisions.
What can I do to manage my cash flow better?
Cash flow is the lifeblood of any small business. It allows you to cover expenses, pay your employees, reinvest in the business, pay off debts, give yourself a return on your investment, and weather any unforeseen circumstances.
If you aren’t managing your cash flow, a great business model and healthy revenues might not be enough. So ask your accountant whether they have any recommendations. They may suggest new key performance indicators or receivables collection practices. They may also help you create a cash flow projection so you can predict and plan for any temporary cash shortages.
What area of my business should be my top priority?
Small business owners have to juggle a lot of shifting priorities. For example, you may have to deal with managing employees and contractors, marketing your products and services, serving clients, hiring, and more.
Are there areas of the business you know need more attention but never have the time or energy to address because you’re always putting out other fires? Ask your accountant for their unbiased opinion on what you should prioritize.
You might realize that some tasks you’ve been handling aren’t as urgent as you thought or that you need to delegate projects to other members of your team.
What type of help do I need?
Considering hiring an employee or independent contractor? Automating some time-consuming and manual tasks? Improving business processes, so you and your team can work more efficiently?
Your accountant should have a good understanding of your operations and team members, so they may be able to suggest where you can fill any gaps. No business owner, no matter how driven or talented, can do it all on their own, so find out where you need the most help. Additional support can free up time to help you focus on your biggest business goals.
Helpful resource: How to Hire Employees: 11 Tips for a Great Hiring Process
Could I benefit from a different business structure?
Your business structure impacts everything from the type of business tax return you file to the taxes you pay and your personal liability if someone sues your business.
Choosing your business structure is probably one of the first steps you took when you started your business. But things change, and the structure that was right when you started your business might not be the best one for you now (or five to ten years from now).
Maybe you started as a sole proprietor but could really use the legal protection of an LLC. Or you already have an LLC but could benefit from the tax advantages of an S corporation.
There’s no one “right” structure for every business, and the right one for you might change as your needs change. Your accountant can provide valuable perspective on whether another structure better suits your long-term growth goals.
Prepare for your conversation by doing your research. Check out our guide to choosing a business structure.
Are there any upcoming tax law or accounting standards changes that might impact me?
IRS rules and business accounting standards change from time to time. While you might not be aware of upcoming changes or understand how they might impact your business, it’s your accountant’s job to stay on top of what’s happening in the industry.
Ask them to shed some light on exactly how those rules might affect you and your business.
For example, the Build Back Better tax and spending proposal would expand the existing Net Investment Income Tax (NIIT) to include active trade or business income from a pass-through business, such as an LLC or S corporation. While that proposal isn’t yet law—and may not pass in its current form, if at all—it can be helpful to discuss “what if” scenarios like this with your accountant.
How can I keep my business and financial data secure?
When you think about cybersecurity, you probably think about an IT consultant instead of your accountant, but accountants today tend to know a lot about data security.
Accountants have to protect a vast amount of sensitive client data, so they need good internal data security practices. Ask your accountant how they recommend protecting your business’s financial, personnel, and client data from cyber theft.
They may be able to look at what you have in place and recommend new software or best practices that will keep your business and its data more secure.
What’s the best way to finance future growth or expansion?
Growth often costs money. If you don’t have the cash on hand to fund your expansion plans, where will it come from?
Entrepreneurs generally have two options: debt or equity financing. Debt financing means you borrow the money from a bank or other lender and repay the small business loan with interest. Equity financing means someone else invests in your business in exchange for a percentage of ownership.
Each option has its pros and cons. Equity financing tends to be better for cash flow because you don’t have to worry about loan payments or interest. However, you may have to give up control over some portion of your company.
Ask your accountant which option they recommend. They can help you walk through your options and the advantages and disadvantages of each.
Am I at risk for a sales tax audit?
Many businesses sell products or services in multiple states. Until recently, businesses in the U.S. didn’t have to worry about collecting sales tax on transactions in other states unless they had “physical nexus,” meaning a brick-and-mortar store, a warehouse, or an employee in that state.
Today, most states base sales tax laws on “economic nexus,” meaning if you sell enough products or services to customers in the state, you have to collect and pay sales tax there.
Every state in the U.S. taxes products and services differently and has different filing requirements, so navigating sales tax laws can be a huge burden for small businesses. Still, it’s one you don’t want to ignore because it can lead to a notice from another state, a lengthy and time-consuming audit, and owing back sales taxes and penalties.
So ask your accountant about your exposure. They can help you figure out where you might have economic nexus and point you to resources for getting compliant if needed.
Want to do a bit more research? You can learn more about sales tax nexus using our simple guide.
What’s the best strategy for increasing profitability?
As a small business owner, you might think that increasing revenue is the only way to grow your business. But revenues are only one piece of the pie.
One of the biggest measures of your business’s success is profitability, and you can improve profitability by increasing revenues, cutting expenses, or taking advantage of a number of other strategies.
Ask your accountant which strategies they recommend. They might suggest:
- Increasing your prices to improve your break-even point
- Reducing costs without sacrificing quality
- Negotiating with suppliers
- Expanding into new markets
- Adding complementary products or services
- Changing to a subscription model
- Investing in a new marketing campaign
- Cross-selling or upselling to existing customers
- Tax planning
There’s no one-size-fits-all method for growing a business, and your accountant can help you identify the right strategies for you.
Helpful resource: Revenue vs. Profit: The Difference and When They Matter
How should I prepare for tax season?
Dealing with income taxes can be the most daunting part of running a business. You may need help knowing how much to set aside for paying your taxes, which business expenses qualify for tax deductions and tax credits, or what documents your accounting firm needs to handle your tax preparation.
Talking through your tax situation with your CPA can give you some peace of mind that you won’t run into any surprises at year-end and ensure you’re prepared to file on time.
If you were me, what would you do?
It’s easy to get so busy dealing with the day-to-day responsibilities of running a business that you don’t take a step back and plan for the big picture. Meeting with your accountant gives you an opportunity to pause and take that step back.
Your accountant serves as a trusted advisor to several clients, so they’re privy to the inner workings of many different companies. They’ve seen business owners struggle and seen them thrive, so while they won’t share any confidential information, they can offer valuable perspective.
So if they were in your shoes, what would they do? Get their objective opinion. You don’t necessarily have to act on it—after all, it’s your business—but knowing what they’d do can give you some good food for thought.
Do you know a good ______?
Do you need a small business loan? Legal advice? Financial or estate planning? Insurance? Real estate? No, your accountant probably can’t provide all of these services, but they might know someone who can.
Accountants tend to be pretty well connected in the business community, so ask them who they’d recommend for any business resource you need.
Keep in mind that some accountants have referral relationships with other business professionals but haven’t actually utilized their services. So you might want to ask whether they’ve worked with them personally or know someone who’s had a positive experience. The most trustworthy referrals come from personal experience.
How Bench can help
Bench is an online bookkeeping service powered by real humans. We provide a dedicated bookkeeper supported by a team of knowledgeable small business experts.
Bench works great with your accountant by providing reliable, up-to-date books that make your accountant’s job easier. When your accountant doesn’t have to spend time digging through bank statements and receipts or coding transactions, you can use their time for what really matters to you: strategic advice for growing your business.
A good accountant’s goal is to help you maintain and grow your business. To do that, they need accurate and timely financial statements and a client who’s interested in taking their advice—not just during tax season, but throughout the year. So make sure you have your books in order and make time for asking the right questions. Then both you and your accountant can achieve your goals.