16 Things You Should Ask Your Accountant As A Small Business Owner

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Unless you are an accountant yourself, keeping financial records up to date and knowing what tax credits you can take advantage of typically fall outside of your expertise.

Second only to poor demand, lack of finance is the biggest contributing factor to why new businesses fail. While dated, a 2015 press release from score.org reported that 40% of small business owners said bookkeeping and taxes were the worst part of owning and running a business.

A business accountant can assist you with many things such as providing advice on estimated tax payments, compiling said taxes and financial reports, and providing advice on property and equipment leasing and purchase.

One in five (20%) of businesses fail in the very first year so to avoid becoming a statistic where one in five businesses fail, we’ve compiled sixteen things you should ask your accountant so that cash flow and bookkeeping don’t become the reason why you can’t fall asleep at night.

Record Keeping

As a business, you must keep record of all the transactions related to taxes. This will help you when you start, run, sell, change or close your business. Keeping accurate and complete records for all your business transactions will also help you manage your business and its cash flow.

Furthermore, if you're selling your business, having well-organized financial records can instill confidence in potential buyers and streamline the sale process. Prospective purchasers often seek transparency in a business’ financial history before investing.

You can either maintain these financial records yourself or engage a bookkeeper or accountant to free up your time.

For a full list of records you should keep for your business, see this IRS document or for those of you in Australia, refer to this resource from the ATO.

Here are a few questions to consider:

  • What documents/receipts do I need to keep?

  • How should I keep these documents?

  • How long do I need to keep these documents?

  • How do I give you these documents and how frequently should this happen?

  • Do I need to use accounting software such as Xero, FreshBooks or QuickBooks?

Tax

All businesses, no matter where they operate, must pay tax on their income. Depending on where your business is located, different tax laws apply and this is one of the reasons why you should have an experienced tax professional who understands your field and corresponding tax system.

For example, in many countries, governments offer tax breaks (or commonly referred to as tax credits, tax rebates, or tax write-offs) that may be applicable - even for small enterprises. To learn more, here are a few additional resources:

Here are a few questions to consider:

  • What are my tax obligations?

  • How should I prepare for tax season?

  • What tax rebates or credits am I entitled to?

  • What business expenses can I deduct?

  • Is my current business structure appropriate for my circumstances?

  • How can I reduce my tax liability and what are the implications of doing so?

Financing

Positive cash flow is necessary for the daily operation of a business. It allows a business to pay taxes, purchase inventory, pay employees/contractors, and make a profit. Positive cash flow doesn’t always happen in the first year of business, however, and this can be due to various factors. Depending on your situation, you may consider business financing.

Financing in this particular context refers to borrowing money. This can take the form of a business loan (from a bank), a line of credit, a business overdraft, or a business credit card. Other non-debt financing options include crowdfunding, family and friends, and angel investors.

Here are some business financing questions you should ask your accountant:

  • How much capital do I need to stay in business?

  • What types of funding do I qualify for?

  • Are there specific loans or grants that I can apply for?

  • Should I consider a secured or unsecured loan?

  • How much can I afford to repay per month?