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Why Accounting is No Longer Just a Necessary Evil

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Jul 12th 2018
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As many of you know, the perception of an accountants’ primary role is to keep clients out of trouble, but of late is has become so much more...at least it could.

For many small business owners these days, their days are consumed with keeping the business afloat as the landscape around them is changing, often for the better. According to the SBA, there are 30.2 million small businesses in the US, all of them trying to be successful, but often it takes an expert to understand how new laws can work in their favor so they can have that success.

As such, clients should think of accountants in the role of efficiency experts. Their CPA understands their business as they have a direct interest in helping the business owner succeed.

Here are 12 ways an accountant who truly understands a business can add value well beyond compliance work:

1. Paying the least amount of taxes required. Years ago, Morgan Stanley ran an ad: “You must pay taxes. But there’s no law saying you gotta leave a tip.” Accountants can help optimize a client’s situation within the rules.

2. Changes in the tax law. The National Federation of Independent Businesses (NFIB) has highlighted three areas of benefit: “Lower individual tax rates, an additional 20 percent deduction for companies filing as pass through entities and an expansion of Section 179 filing, which allows for expensing of business related equipment.” - Forbes

3. Budgeting. Your business owner client may be hopeless in keeping records and planning for future expenses. You can help by setting up a plan for the next 18-36 months and checking in to see that they are sticking to it.

4. Maintaining the corporate veil. The above client’s hopelessness may mean they appear to run their business and personal lives out of the same pocket. You can help keep each aspect separate.

5. Advise on acquisitions.  Similar business nearby might be up for sale to help your client expand. Maybe a local business owner is getting older and their kids don’t have an interest in continuing the business. Your advise is what they will listen to.

6. Preparing to sell the business. Now the shoe is on the other foot. Almost all of your client’s wealth is tied up in the business. They want to cash out and you can help get them ready.

7. Going public. Your small business client was a startup. They aren’t that small anymore. They want to expand on a major scale and this requires big money. Is taking the company public an option? According to www.iposcoop.com, in the first six months of 2017, 174 companies had IPOs. Some might be spinoffs, others are not.

8. Is your clients' pay rate competitive? Is it difficult for them to hire qualified employees? Is high turnover a problem? Accountants can help determine if they are paying enough to attract talent.

9. Negotiating with vendors. People might negotiate aggressively with your business owner client, yet they might stay with the same trash collection, phone service provider and insurance company for years. You can explain RFPs and other ways to negotiate with vendors. 

10. Identify money losing segments of the business. Force of habit may keep your client from producing and selling products where there’s declining demand. They might be losing money in the process and as an accountant you can tell them when it’s time to get out.

11. Utilizing staff efficiently. No one wants people sitting around doing nothing or waiting for customers that aren’t coming. Meanwhile, there are new projects on hold because your client doesn’t have people assigned to them. The accountant can see the big picture.

12. Advising on technology. Sure it costs money, but it can save money and track inventory or perform necessary but time-consuming tasks. Data security is also a growing problem and without violating client confidentiality, accountants can let them know how other businesses are using technology to their benefit or guide clients on their own selection.

Perhaps, at the end of the day, small business clients should consider you as an efficiency expert who also happens to do their taxes.

Replies (2)

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Rajvir Jhala
By Rajvir
Jul 17th 2018 08:57 EDT

Yes, we should not limit ourselves to accounting, auditing & tax. We are capable of much more and clients have started recognizing that in recent period.

Thanks (1)
Replying to Rajvir:
Me
By lg melacarne
Jul 22nd 2018 18:44 EDT

Yes you are right...

Rajvir wrote:

Yes, we should not limit ourselves to accounting, auditing & tax. We are capable of much more and clients have started recognizing that in recent period.

Thanks (1)