You may know accountants are experts at crunching numbers, and that their knowledge could be useful to your small business. But, you may not be aware of everything an accountant brings to the table. What does an accountant do, exactly?
Accountants’ vast skill set extends well beyond the basic numbers game. We’ll put this role in the spotlight as we learn more about all that accountants can do to help a business thrive.
Read on to learn about the main duties of an accountant (and Certified Public Accountant), questions to screen a future accountant, and more.
Skip Ahead
- Ideal accountant skill set: The soft skills
- What does an accountant do?
- What does a CPA do?
- What to ask an accountant
- So, what do accountants do? At-a-glance
Ideal accountant skill set: The soft skills
While accounting is a technical and specialized field, soft skills are just as necessary to succeed in this role.
Here is a list of ideal skills to look for that distinguish an excellent accountant :
- ttention to detail
- Analytical thinking
- Problem solving
- Time management
- Communication
- Organization
- Adaptability
Soft skills—particularly the above—contribute to the value an accountant adds to your business.
Attention to detail ensures they don’t miss key financial data that could impact your company’s growth.
Analytical thinking and problem-solving skills identify patterns, spot inefficiencies, and create actionable plans.
Time management keeps financial reporting and tax filings on schedule.
Communication skills are key when an accountant needs to explain complex and technical concepts in a way that makes sense. Your accountant’s ability to organize tasks helps them juggle multiple responsibilities at once.
Tax laws and technology (e.g., accounting software and payroll) shift constantly. Your accountant should be able to adapt and continue learning to keep up with changes.
What does an accountant do?
The accountant you work with can do everything from advising you on business decisions to helping you file your small business tax return.
You may hire an accountant to do one or more of the following:
| What Do Accountants Do? List of Services | What Does This Include? |
|---|---|
| Financial reporting | –Preparing financial statements (e.g., P&L statement) –Analyzing and interpreting statements |
| Financial management | –Managing cashflow –Budgeting |
| Taxes | –Tax planning –Preparing tax returns |
| Compliance | –Keeping up with tax law changes –Submitting financial documents |
| Small business loan planning | –Preparing your application –Analyzing best financing options |
| Accounting system management | –Choosing the right accounting software |
| Advisory | –Advising –Answering questions |
1. Financial reporting
Accountants can keep your business dealings up-to-date with regular financial reporting (e.g., quarterly and annual statements).
An accountant is an expert at analyzing your financial data to maximize profitability, identify areas for improvement, and project future business growth.
Financial reporting services include:
- Preparing financial statements
- Income statement
- Balance sheet
- Cash flow statement
- Analyzing and interpreting statements
Pro Tip: Use accounting software to generate financial reports. For example, Patriot Software makes it easy to share reports with your accountant in the accounting basis they want (i.e., accrual!). You can give your accountant access to your account or download reports as a PDF or spreadsheet. This makes it easy for them to analyze and interpret statements.
2. Financial management
Financial management is a cornerstone of an accountant’s work. Your cashflow and budget are key to your company’s financial health, and your accountant can make sure you’re on the right track.
You don’t want to run out of money right when it’s time to pay a big vendor. An accountant will not only keep you on track with current finances, but they will strengthen your cashflow and create a budget that sets you up for future growth and success.
Financial management services include:
- Managing your cashflow
- Creating your small business budget
3. Taxes
Tax season—it’s here every spring. An accountant can have you ready by properly planning and ensuring accurate and timely filing of tax returns.
IRS or state tax audit? An accountant can represent your business by preparing documentation to audit inquiries and help resolve discrepancies to reduce potential penalties or fines.
Here are a few tax-related services your accountant may offer:
- Tax planning
- Tax return preparation
- Tax compliance
- Tax audits
4. Compliance
Businesses must adhere to a wide range of laws and financial regulations—both federal and state. Accountants help you stay compliant by ensuring your business complies with the latest legal standards.
This includes understanding GAAP (Generally Accepted Accounting Principles), keeping up with tax law changes, and submitting required financial documents on time. Falling out of compliance can lead to penalties, so an accountant acts as your safeguard against costly regulatory missteps.
Your accountant can also help you establish strong internal controls to reduce errors, detect and prevent fraud, and improve efficiency. They can even conduct or support internal audits.
Here’s an overview of how your accountant keeps your business compliant:
- Keeping up with tax law changes
- Submitting financial documents on time
- Establishing internal controls (e.g., segregation of duties)
- Conducting or supporting internal audits
5. Small business loan planning
Need funding to expand your operations or invest in equipment? An accountant can help you obtain a business loan or other financing. They can prepare necessary documents, compare small business loan interest rates, and forecast your ability to repay.
Your accountant’s insight ensures you’re both eligible for financing and choose a loan that aligns with your business’s short- and long-term goals. Banks and investors are more confident when your financials are clearly presented and professionally reviewed.
Your accountant’s small business loan planning includes:
- Preparing documentation
- Applying for the loan
- Analyzing best financing options
- Planning loan repayment
6. Accounting system management
Choosing the right accounting system—and using it effectively—can save time, reduce errors, and give you real-time insight into your finances.
An accountant can help set up and customize accounting software to match your operations, integrate it with payroll or inventory systems, and train your team.
Here are a few ways your accountant can help you with getting an accounting system:
- Choosing the right accounting software
- Customizing your software, if applicable
- Training staff
7. Advisory services
Beyond number crunching, accountants are trusted advisors. Whether it’s helping you choose the best legal structure for tax purposes, offering strategies to reduce expenses, or guiding you through a major transition like a merger or acquisition, their advice can shape key business decisions.
Think of an accountant as a financial strategist who shows you the big picture while staying grounded in the numbers.
Your accountant’s advisory services can help you:
- Reduce expenses
- Guide through transitions
- Help see the big picture
What does a CPA do?
An accountant is a professional who possesses a bachelor’s degree in accounting. A Certified Public Accountant, or CPA, is a licensed accountant who has also earned their CPA license through a combination of experience, education, and examination.
A CPA is licensed through a professional governing body, and must engage in continuing education to maintain their license.
They are upheld to a specific code of ethics, including a fiduciary standard, which means their clients’ interest must be put first.
All CPAs are accountants, but not all accountants are CPAs. Approximately 50% of all accountants in the U.S. are CPAs. There are about 671,855 CPAs, according to the National Association of State Boards of Accountancy. And according to the BLS, there are about 1,562,000 accountant jobs in the U.S.
What to ask an accountant
You know what they do. Now, are you ready to start working with an accountant?
Here are some questions to help you decide who your business needs:
- What services do you offer?
- Do I get a discount if I use more than one service?
- Do you offer long-term contracts?
- What payroll software do you recommend?*
- What accounting software do you recommend?*
*(We hope they’ll say Patriot Software, of course, but we’re not biased here!)
So, what do accountants do? At-a-glance
Here’s a list of some main points to keep in mind when considering an accountant. An accountant can:
- Keep your business finances organized
- Help you plan and project for maximized profits
- Stay up-to-date with current tax laws
- Get you up to speed with the latest and most efficient accounting system management
- Be a trusted financial advisor
The Bottom Line: Accountants can be an invaluable resource for your small business.
You might consider signing up with easy-to-use accounting software to handle your expense and income tracking, create invoices, and generate financial reports. With organized and up-to-date books, you can make your meetings with your accountant or Certified Public Accountant shorter and more productive—saving you time and money.
This is not intended as legal advice; for more information, please click here.
