What does an accountant do for your small business?

Published Monday 30 March 2026

Table of contents

• What is an accountant?
• What accountants do: core duties
• Types of accountants
• Beyond the basics: Strategic services accountants provide
• How accountants support small businesses with technology
• The personal side of working with an accountant
• How to find the right accountant for your small business
• Get the most from your accounting relationship
• FAQs on what accountants do

Key takeaways

• Recognise that accountants provide strategic business advice beyond basic bookkeeping, including cash flow management, business planning, and growth strategies that help you make informed decisions and focus on running your business.
• Utilise your accountant's tax expertise year-round to reduce your tax burden through legitimate strategies, maintain compliance, and prepare defensible returns that help you avoid audits.
• Choose an accountant who understands modern technology and can set up automated systems for invoicing, expense tracking, and financial reporting to save you time and provide real-time visibility into your business performance.
• Find an accountant you connect with personally and professionally by asking for recommendations from trusted contacts, checking professional associations, and prioritising someone who understands your industry and business goals.

What is an accountant?

An accountant is a financial professional who manages your business financial records, ensures accuracy, and provides strategic advice. While bookkeepers handle day-to-day transaction recording, accountants analyse financial data, prepare reports, file taxes, and help you make informed decisions.

For small businesses, accountants serve as trusted advisers who go beyond compliance work. They help you understand your numbers, plan for growth, and avoid costly financial mistakes.

Most small businesses work with public accountants or certified public accountants (CPAs) who serve multiple clients and offer services like tax preparation, financial reporting, and business advisory.

What accountants do: core duties

While many accountants offer strategic advice, they all handle a core set of financial tasks. These duties are the foundation of keeping your business financially healthy and compliant.

Keeping financial records and preparing reports

Accountants ensure your financial records are accurate and organised. They prepare essential reports like the profit and loss statement and balance sheet, giving you a clear view of your business performance.

Preparing taxes and staying compliant

Accountants do more than file your tax returns – they help you pay less and stay compliant year-round.

A great accountant will:

• Reduce your tax exposure: find legitimate ways to lower what you owe
• Resolve old tax debts: negotiate with authorities on your behalf
• Fix poor record-keeping: organise your financial documentation
• Help you avoid audits: keep your returns accurate and defensible
• Prepare for audits: ensure your books are watertight if questions arise

Managing payroll and expenses

Accountants can manage your payroll to ensure staff are paid correctly and on time. They also track business expenses, helping you understand where your money is going and identifying opportunities to save.

Types of accountants

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

Public accountants and CPAs

Public accountants work with multiple clients and handle external services like tax preparation, auditing, and financial reporting. Certified public accountants (CPAs) have passed additional exams and meet strict licensing requirements. For example, all states require candidates to complete 150 semester hours of college coursework to be licensed.

For most small businesses, a public accountant or CPA provides comprehensive support. The latter's expertise is often reflected in higher earnings; one report found the average CPA salary exceeds general accountants by more than $42,000. Learn more about accountant and bookkeeper differences.

Management accountants

Management accountants work within organisations to support internal decision-making. They focus on budgeting, forecasting, and financial analysis to help leadership plan strategically.

Tax accountants

Tax accountants specialise in tax planning and preparation. They stay current on tax law changes and help you minimise your tax burden while staying compliant.

Advisory accountants

Advisory accountants act as strategic business consultants. They help with business planning, growth strategies, and financial decision-making – ideal for small businesses looking to scale.

Beyond the basics: Strategic services accountants provide

Accountants manage your finances so you can focus on running your business. Here's what they bring to the table:

• Strategic advice: identify ways to save money and boost revenue
• Administrative relief: automate tasks that distract you from core work
• Financial clarity: give you confidence in your business decisions

The real question isn't what accountants do; it's what they can't do for your business.

Planning your business and setting strategy

Accountants help you focus on what matters most when your business becomes complex.

They'll work with you to set goals – personal, professional, and financial – then give you tools to measure progress. You'll end up with key performance indicators (KPIs) that show exactly how your business is performing.

If you use accounting software, your accountant can:

• Set up dashboards: check your KPIs anytime, day or night
• Troubleshoot issues: identify what's not working
• Test solutions: try different approaches to improve results
• Reset targets: adjust KPIs as your business evolves

Starting a new business takes more than a good idea. You need to know it will make money, and you'll need to do market research to validate your concept and convince investors and lenders.

An accountant can help you:

• Test your idea: validate whether your concept is financially viable
• Identify costs: map out startup and operating expenses
• Create forecasts: build credible revenue projections investors trust. These often use pro forma statements, which don't typically comply with Generally Accepted Accounting Principles (GAAP) because they exclude one-time expenses.
• Find funding: connect with lenders who are actively supporting businesses like yours
• Refine your pitch: prepare you to impress potential backers

Managing cash flow and planning finances

Accountants help you maintain healthy cash flow when you need it most. Profitable businesses succeed when they ensure cash arrives before bills are due.

Your accountant understands that revenue and costs ebb and flow. They'll help you:

• Predict cash flow: forecast when money will come in and go out
• Build reserves: set aside funds for lean periods
• Create spending plans: ensure there's always enough to cover essentials
• Reduce stress: make payday and supplier payments predictable

Accountants create accurate budgets so you can work from precise figures and solid data.

A rigorous budget tells you:

• True operating costs: what it actually takes to run your business
• Reinvestment capacity: how much you can put back into growth
• Owner's pay: what you can realistically pay yourself

Accountants help you manage debt strategically, distinguishing between borrowing that helps your business grow and debt that holds you back.

Your accountant will:

• Find affordable borrowing: identify options with the right balance of flexibility and low interest
• Handle refinancing: restructure existing debt when better terms are available
• Advise on repayment timing: determine when to pay down loans versus reinvest in growth
• Create a custom strategy: develop a plan based on your specific financial situation

Accountants help you get paid faster by taking invoice collection off your plate.

Here's how they tackle unpaid invoices:

• Automate reminders: set up systems that notify customers when bills are due or overdue
• Follow up directly: some accountants will call businesses to ensure payment
• Arrange invoice financing: if invoices stay unpaid, they can connect you with services that buy your receivables and handle collection

Accountants help you hire smartly by analysing the financial impact of adding staff.

Your accountant can:

• Identify the right role: determine which hire will boost your bottom line most
• Calculate total costs: factor in hiring, training, and ongoing salary expenses
• Set up compliant payroll: handle government paperwork, tax, and insurance requirements

Operating efficiently and managing costs

Accountants find hidden costs and help you operate more efficiently.

Business expenses can climb quickly in areas like:

• Storage: physical warehousing or IT infrastructure
• Energy: electricity, gas, and utilities
• Staff: wages and productivity losses from downtime

Your accountant will identify unnecessary spending and develop strategies to reduce it.

Accountants optimise how you manage inventory to reduce storage costs and prevent stockouts.

Your accountant will:

• Calculate holding costs: identify how much inventory is actually costing you
• Predict demand: review sales data to forecast what you'll need
• Automate ordering: set up software that tracks levels and reorders when stock runs low

Raising funds and applying for loans

Accountants help you secure funding by turning your financials into a compelling story.

Lenders need solid numbers and credible forecasts, but that's just the start. Your accountant will:

• Build a persuasive presentation: sell the wider vision for your business
• Visualise your data: replace spreadsheets with graphs and charts that show the opportunity
• Use trusted tools: create forecasts with software loan officers recognise and trust
• Connect you with lenders: identify which funders are actively supporting businesses like yours

How accountants support small businesses with technology

Modern accountants use technology to make your life easier. They can set up and manage software that automates routine tasks, saving you time and giving you a real-time view of your finances.

Setting up and optimising accounting software

Accountants set up accounting software that automates your financial admin and gives you real-time visibility.

They'll configure systems so sales and expense data flows directly into your accounts. Smart invoicing tools track what's been paid and send automatic reminders to late payers.

Other automated systems your accountant can implement:

• Cash flow dashboards: see your financial position at any time
• KPI tracking: monitor overall business performance 24/7
• Automated accounts payable: stay on top of expenses without manual effort
• Mobile accounting apps: manage finances from anywhere

Integrating business apps and tools

Tech-savvy accountants connect your business tools to automate manual tasks and reduce admin time. They often use integration platforms for accounting automation that can connect over 200 apps.

They can set up affordable software for:

• staff scheduling and time recording
• point-of-sale systems
• payment processing
• customer relationship management
• invoicing
• payroll

Automating these processes lowers costs and keeps operations running smoothly. Look for an accountant who understands modern business apps.

The personal side of working with an accountant

A good accountant provides more than financial advice; they offer support when business gets tough.

Running a business can be lonely. When challenges feel overwhelming, your accountant can help you stay focused and motivated.

They understand how much your business means to you. They'll break down big problems into manageable parts and help you see a clear path forward.

How to find the right accountant for your small business

Start by asking people you trust – friends, family, and business partners often have accountant recommendations.

For more options, try these approaches:

• Check professional associations: accounting bodies maintain directories of qualified members
• Ask your industry network: other business owners in your sector may know specialists
• Try Xero's Advisor Directory: find accountants who understand cloud software and modern business tools

Modern accountants come from diverse backgrounds, and finding one you connect with personally can transform your business relationship.

Today's accountants are mobile and hands-on. Many visit your workplace to understand how your business actually operates. Check out accountant and bookkeeper stories to learn about advisers from unexpected backgrounds.

Finding an accountant you relate to on both a personal and professional level makes all the difference.

Get the most from your accounting relationship

The right accountant transforms how you run your business. A proactive adviser can make an amazing difference to how you run your business.

A great accountant does whatever your business needs. They'll solve problems directly or connect you with someone who can.

When choosing an accountant, look beyond knowledge and skill. Find someone you can have frank conversations with – an adviser you genuinely like working with.

Looking for an accountant who uses technology to help your business? Connect with advisers in Xero's Advisor Directory. With cloud accounting software, you and your accountant can work together seamlessly. Get one month free.

FAQs on what accountants do

Here are answers to common questions about what accountants do and how they can help your small business.

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

Bookkeepers record daily transactions and maintain your financial records, while accountants analyse that data, prepare financial statements, ensure tax compliance, and provide strategic advice. This difference in scope is reflected in compensation; according to the BLS, the median salary for an accountant in 2023 was $79,880, compared to the national average of $47,440 for bookkeepers.

What's the main job of an accountant?

An accountant's main job is to ensure your financial records are accurate, your business complies with tax regulations, and you have the information you need to make sound financial decisions.

Do I need an accountant if I use accounting software?

Yes, software and accountants work together. Accounting software automates data entry and reporting, while accountants interpret that data, provide strategic advice, and ensure compliance. Xero-connected accountants can access your books in real time for faster, more informed support.

How much does it cost to hire an accountant?

Costs vary based on location, services needed, and business complexity. Small business accountants typically charge by the hour, monthly retainer, or per project. Expect to pay more for specialised services like tax planning or business advisory.

When should I hire an accountant for my small business?

Consider hiring an accountant when you're starting a business, experiencing growth, facing complex tax situations, needing strategic advice, or spending too much time on bookkeeping instead of running your business.