What does an accountant do for your small business?

Published Monday 30 March 2026

Table of contents

• What is an accountant?
• Core responsibilities of an accountant
• Types of accountants and specialists
• 14 things you didn't know an accountant could do
• And let's not forget tax
• When should you hire an accountant?
• How to find an awesome accountant
• Manage your finances with clarity using Xero
• FAQs on what accountants do

Key takeaways

• Recognise that accountants provide strategic business support beyond tax returns, including cash flow management, business planning, loan applications, and technology implementation to help your business grow.
• Consider hiring an accountant when your business is growing, you're spending too much time on bookkeeping, or you need data-driven insights for major decisions like hiring staff or seeking finance.
• Choose between different types of accounting professionals based on your needs: tax accountants for compliance, management accountants for internal decision-making, or CPAs for certified services like auditing.
• Find the right accountant by asking for referrals from trusted contacts, checking their qualifications and technology skills, and meeting them personally to ensure you connect professionally.

What is an accountant?

Here's what you need to know about this essential financial role.

An accountant is a financial professional who records, analyses, and reports on your business finances. Accountants ensure your financial records are accurate, help you meet tax obligations, and provide insights that support better business decisions.

While many people associate accountants with tax returns, their role extends much further:

• Financial record-keeping: Maintain accurate books that track income, expenses, and assets.
• Tax compliance: Prepare and lodge tax returns while identifying legitimate deductions.
• Financial reporting: Create statements that show how your business is performing.
• Strategic advice: Use financial data to help you plan for growth and manage risk.
• Regulatory compliance: Ensure your business meets legal and industry requirements.

For small businesses, which make up more than 95% of enterprises across the world, an accountant often becomes a trusted advisor who helps you understand your numbers and make confident decisions.

Core responsibilities of an accountant

Accountants handle the financial backbone of your business. Their core responsibilities ensure your records are accurate, your taxes are paid, and you have the information needed to make sound decisions.

Here are the primary duties most accountants perform:

• Prepare financial statements: Create profit and loss reports, balance sheets, and cash flow statements.
• Manage tax compliance: Calculate obligations, lodge returns, and identify deductions.
• Maintain bookkeeping records: Track transactions, reconcile accounts, and organise documentation.
• Provide financial forecasting: Project future revenue, expenses, and cash flow.
• Offer strategic advice: Analyse data to help you plan for growth and manage challenges.

These responsibilities form the foundation of accounting services. But the best accountants go well beyond the basics.

Types of accountants and specialists

Different accountants specialise in different areas. Understanding these distinctions helps you find the right fit for your business needs.

Tax accountants

Tax accountants focus on tax compliance and planning. They prepare your returns, identify deductions, and develop strategies to minimise your tax exposure legally. If tax is your primary concern, a tax accountant is the right choice.

Management accountants

Management accountants work inside businesses to support decision-making. They analyse costs, prepare budgets, and provide financial insights that help you run operations more efficiently. They're common in larger businesses but can add value to growing small businesses too.

Financial accountants

Financial accountants prepare external financial statements and ensure compliance with accounting standards, such as the Conceptual Framework for Financial Reporting issued by the International Accounting Standards Board.

Accountant vs. bookkeeper: what's the difference?

Bookkeepers handle day-to-day transaction recording, while accountants analyse that data and provide higher-level advice. Bookkeepers enter invoices, reconcile accounts, and maintain records. Accountants interpret those records, prepare financial statements, and advise on strategy.

Many small businesses use both: a bookkeeper for routine tasks and an accountant for tax, compliance, and planning.

What is a CPA?

A CPA (Certified Practising Accountant) has completed additional qualifications and meets ongoing professional standards set by bodies like the Association of International Certified Professional Accountants, which represents 657,000 members and students. CPAs can offer services that require professional certification, such as auditing and certain tax representations. If you need certified financial statements or specialist tax advice, look for a CPA.

14 things you didn't know an accountant could do

Beyond the core responsibilities covered above, accountants can transform how you run your business in unexpected ways. Here are 14 ways they can add value you might not expect.

1. Launch a startup

Launching a startup requires more than a good idea. You need to prove it will make money and convince investors and lenders to back you. An accountant can help you do both.

Here's how an accountant supports your startup:

• Test your business idea: Validate whether your concept can generate sustainable revenue.
• Identify costs: Map out startup expenses and ongoing operating costs.
• Create financial forecasts: Build credible revenue projections that lenders trust.
• Connect you with finance: Identify which lenders are actively funding businesses like yours.
• Refine your pitch: Prepare compelling presentations that impress investors.

2. Help with business strategy

Business strategy involves setting clear goals and tracking progress toward them. An accountant helps you cut through complexity and focus on what matters most.

Here's how accountants support your business strategy:

• Set meaningful goals: Define personal, professional, and financial targets for your business.
• Create KPIs: Establish key performance indicators that show how your business is tracking.
• Build dashboards: Set up real-time reporting in your accounting software so you can check progress anytime.
• Troubleshoot problems: Identify issues early and test solutions to get back on track.

3. Fix your cash flow

Cash flow management keeps your business solvent by ensuring you have money when you need it. Many profitable businesses fail simply because they run out of cash at the wrong time.

An accountant helps you stay ahead of cash flow challenges:

• Predict cash movements: Forecast when revenue will arrive and when expenses are due.
• Build cash reserves: Set aside funds to cover gaps between payments.
• Create spending plans: Ensure there's always money available for payroll and suppliers.
• Reduce stress: Make payday predictable and supplier relationships smoother.

4. Listen and support you

Running a business can feel isolating, especially when challenges pile up. A good accountant does more than work with numbers. Guided by a professional Code of Ethics, they provide the support and perspective you need to stay focused.

Here's how accountants offer emotional and practical support:

• Understand your goals: Recognise how much your business means to you personally.
• Provide reassurance: Help you stay confident during difficult periods.
• Break down problems: Turn overwhelming challenges into manageable steps.
• Keep you focused: Remind you why you started and help you push through tough times.

5. Manage your debt

Debt management involves using borrowing strategically to grow your business while minimising costs. An accountant helps you distinguish between debt that helps and debt that hurts.

Here's how accountants manage your debt:

• Find affordable borrowing: Identify loans with the right balance of flexibility and low interest.
• Handle refinancing: Restructure existing debt to reduce costs or improve terms.
• Advise on repayments: Determine when to pay down loans versus reinvest in growth.
• Create tailored strategies: Analyse your specific financials to develop a debt plan that fits your business.

6. Deal with unpaid invoices

Unpaid invoices drain your time and cash flow. Chasing late payments is a distraction, but ignoring them hurts your business. An accountant can handle collections so you don't have to.

Here's how accountants manage unpaid invoices:

• Set up automated reminders: Configure your invoicing system to send payment reminders when bills are due or overdue.
• Follow up directly: Contact customers who don't respond to automated messages.
• Arrange invoice financing: Sell unpaid invoices to a third party who collects payment on your behalf.

7. Write and pitch loan applications

Loan applications require both solid numbers and a compelling story. An accountant helps you present your business in the best possible light to secure funding.

Here's how accountants strengthen your loan applications:

• Prepare financials: Compile accurate statements and credible forecasts that lenders require.
• Build your narrative: Craft a presentation that sells your business vision, not just the numbers.
• Visualise the opportunity: Create graphs and charts that help lenders see your potential.
• Use trusted tools: Apply forecasting methods that loan officers recognise and respect.

8. Budget smartly

Budgeting gives you a clear picture of your income, expenses, and what's left over. Without accurate numbers, you're making decisions based on guesswork.

An accountant creates a rigorous budget that shows you:

• Your true operating costs: Understand exactly what it takes to run your business.
• Available funds for reinvestment: Know how much you can put back into growth.
• What you can pay yourself: Set realistic owner drawings based on actual performance.

9. Get you staffed up

Hiring staff is a major financial decision. An accountant helps you determine who to hire, what it will cost, and how to manage payroll compliantly.

Here's how accountants support your hiring decisions:

• Identify the right role: Determine which hire will have the biggest impact on your profits.
• Calculate total costs: Factor in salary, training, benefits, and ongoing expenses before you commit.
• Set up compliant payroll: Handle government paperwork, tax withholding, and insurance requirements.

10. Set up your cloud accounting software

Cloud accounting software automates routine financial tasks so you spend less time on admin. An accountant sets up your system to capture data automatically and give you real-time visibility.

Here's what an accountant can automate for you:

• Sales and expense tracking: Connect your accounts so transactions flow in automatically.
• Invoicing and reminders: Send invoices and follow up on unpaid bills without manual effort.
• Cash flow dashboards: See your current financial position at any time.
• KPI tracking: Monitor business performance around the clock.
• Accounts payable: Stay on top of bills and supplier payments.
• Mobile access: Manage your finances from anywhere using accounting apps.

11. Help you manage inventory

Inventory management affects both your costs and your revenue. Holding too much stock ties up cash, while running out means lost sales. An accountant helps you find the right balance.

Here's how accountants improve your inventory management:

• Calculate holding costs: Identify how much you're spending on storage, insurance, and obsolete stock.
• Predict demand: Analyse sales data to forecast what you'll need and when.
• Optimise ordering: Place accurate orders that reduce waste and prevent stockouts.
• Automate tracking: Set up software that monitors inventory levels and reorders automatically.

12. Improve your business efficiency

Operational efficiency means reducing unnecessary costs while maintaining or improving output. An accountant identifies where you're overspending and helps you work smarter.

Common areas where accountants find savings:

• Storage costs: Reduce expenses for physical space or IT infrastructure.
• Energy usage: Lower electricity, gas, and utility bills.
• Staff productivity: Minimise downtime and improve how your team spends their time.
• Process improvements: Streamline workflows to eliminate waste and duplication.

13. Unlock the power of technology

Business technology automates manual tasks, reduces errors, and frees up your time. A tech-savvy accountant helps you choose and set up the right tools for your business.

Here are common systems an accountant can implement:

• Staff scheduling: Track employee hours and manage rosters automatically.
• Point of sale: Process transactions and sync sales data with your accounts.
• Payment processing: Accept payments online and in person with minimal effort.
• Customer relationship management: Organise contacts and track interactions in one place.
• Invoicing: Send bills and follow up on payments automatically.
• Payroll: Calculate wages, deductions, and tax obligations each pay period.

Automating these processes lowers costs, reduces mistakes, and keeps your business running smoothly.

14. Find an accountant you connect with

Modern accountants work closely with you to understand your business. Many come from diverse backgrounds and will visit your workplace to see how things actually run.

Finding an accountant you connect with personally and professionally makes a real difference. Read accountant and bookkeeper stories to see the range of people working in the field today.

And let's not forget tax

Tax compliance involves more than filing returns on time. A great accountant helps you minimise what you owe and stay organised. Professional ethics codes guide them on handling potential non-compliance with law and regulations to avoid problems with tax authorities.

Here's how accountants handle your tax:

• Reduce your tax exposure: Identify deductions and strategies that lower your bill legally.
• Resolve old tax debts: Negotiate payment plans or settlements with tax authorities.
• Fix record-keeping issues: Organise your documentation so nothing gets missed.
• Prevent audits: Maintain accurate records that reduce your audit risk.
• Prepare for audits: Ensure your books are accurate and complete if you're ever reviewed.

When should you hire an accountant?

The right time to hire an accountant depends on your business stage and the challenges you're facing. Some businesses benefit from professional help from day one, while others manage independently until complexity increases.

Here are signs it's time to bring in an accountant:

• Your business is growing: Increased revenue, more transactions, and new complexity require professional oversight.
• You're spending too much time on bookkeeping: If admin tasks are pulling you away from core work, an accountant can take over.
• Tax time causes stress: If you dread tax season or worry about mistakes, professional help reduces risk and anxiety.
• You need financial insights: When gut feelings aren't enough, an accountant provides data-driven guidance.
• You're planning big changes: Hiring staff, seeking finance, or expanding operations all benefit from expert input.

Even if your business is simple today, building a relationship with an accountant early means you have trusted support when things get more complex.

How to find an awesome accountant

Finding the right accountant starts with asking people you trust. Friends, family, and business partners can recommend accountants they've worked with successfully.

Here's how to find an accountant who fits your business:

• Ask for referrals: Get recommendations from people whose judgement you respect.
• Check qualifications: Look for relevant certifications and industry experience.
• Assess tech skills: Choose someone who understands cloud accounting software.
• Meet before committing: Have a conversation to see if you connect personally.

If referrals don't work out, explore the Xero Advisor Directory to find accountants who offer a wide range of services and understand modern business software.

Manage your finances with clarity using Xero

Accountants work best with the right tools. Xero's cloud-based accounting platform connects you with your accountant in real time, automates routine tasks, and gives you clear insight into your finances so you can grow confidently.

With Xero, you and your accountant can:

• Collaborate in real time: Share access to the same data without emailing files back and forth.
• Automate routine tasks: Reduce manual data entry with bank feeds and smart reconciliation.
• Track performance anytime: Check cash flow, invoices, and reports from any device.
• Stay compliant: Keep accurate records that make tax time simpler.

Whether you're just starting out or ready to scale, Xero makes it easy to manage your books and work seamlessly with your accountant. Get one month free and see how smart accounting software can help your business.

FAQs on what accountants do

Still have questions about what accountants do and whether you need one? Here are answers to common questions.

What's the difference between an accountant and a bookkeeper?

See the 'Accountant vs. bookkeeper' section above for details on the differences between these roles.

Do I need an accountant if I use accounting software like Xero?

Yes. Accounting software handles data entry and reporting, but an accountant interprets your numbers, ensures compliance, and provides advice that software can't. The two work best together.

How much does hiring an accountant typically cost?

Costs vary based on services, complexity, and location. Many accountants charge hourly rates or fixed fees for specific services like tax returns. Ask for a quote based on your actual needs.

What qualifications should I look for in an accountant?

Look for relevant certifications such as CPA (Certified Practising Accountant) or CA (Chartered Accountant). Also consider industry experience, technology skills, and whether they understand businesses like yours.

Can an accountant help with more than just tax returns?

Yes. Accountants provide cash flow management, budgeting, business strategy, loan applications, payroll setup, and technology implementation. Tax is just one part of what they offer.