Why your accountant isn’t proactive

“My accountant isn’t proactive”

I hear this comment all the time from small business owners.

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I ask them to explain what they mean by ‘proactive’, and they usually respond with , “I’m looking for one that helps me look forward, not backwards”. 

“One to help me set financial goals, use my financials to make decisions, help with cash flow, improve my profit”.

My response is it’s not your accountant’s fault they aren’t helping you with these services.

Rather, it’s because it’s not their job.

In fact, your accountant probably is proactive when it comes to tax structuring and compliance.

But what you’re looking for is not what you get from a typical small business accountant.

Instead of a new ‘proactive accountant’, you need a different type of accountant altogether.

What accountants do for your business

99% of small business accountants are tax agents. 

Their technical expertise, role and revenue stream is dependent on tax compliance. That is filing your tax returns, dealing with regulatory bodies, keeping you compliant. 

They’ve spent their entire career specialising in this field of accounting.

Tax is calculated on your historical financial position, not on future growth… That’s why most tax accountants look backwards. 

You don’t pay tax on potential – so there’s no reason for your tax accountant to look forward.

You need a different accountant altogether

Medium and large businesses engage with more than one accountant in their business. 

Yes, they still have an accountant to manage tax compliance, but they also have other forms of accountants – ranging from financial accountants, financial manager, management accountants and CFOs. 

The role of these accountants are focused on the future growth and financial operations of the company. They do business financial planning, developing and reporting on KPIs, cash flow management and forecasting and providing insights to the owners and managers on what the numbers are saying. Ultimately, the goal is to leverage these insights to improve profit, cash and financial value of your business.

Overall, there is a big difference between a commercially minded financial manager/CFO and a tax accountant. 

Indeed, they are both technically accountants. But your tax accountant’s focus is tax compliance.

The financial manager’s focus is on driving financial performance. These are completely different frames and capabilities.

The chart below breaks down the roles and responsibilities of a tax accountant vs a management accountant/CFO.

Where do I find a financial accountant/financial controller for my business?

It’s rare to find this type of strategic financial accountant in the small business space. 

Why? Well firstly, they cost a lot. Many small businesses can’t justify the costs of a full-stack finance team, costing upwards of $300k of fixed annual salary costs in their business. 

But secondly, it’s quite a narrow field of expertise. It takes a different approach of accounting to blend commercial and financial strategy and apply that to fast-growing business.

That’s why we started SBO.Financial – a different type of accounting firm to provide the full stack of financial services – from CFO, management accounting and bookkeeping, for a fraction of the cost. 

Yes, we are accountants, but we don’t do tax returns. You can’t be everything to everyone.

So, next time you’re thinking about why your accountant isn’t proactive – just be clear about what you’re looking for. 

Rather than replacing your accountant, it’s likely that you need a different type of accountant altogether.

As Elvis Presley once said:

I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants.

I figure Presley meant one accountant to handle the taxes, the other to handle the financial growth and management of his empire.

Thank you very much.

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