What Does An Accountant Do For A Small Business? 13 Benefits Explained

Picture this: you’ve been running your own business for about a year. 

You spent the first month in a daze of activity, getting things open and hiring staff. The next three months were spent regularizing your operations, the next three were spent trying to understand why you weren’t making sales, and the final three were spent getting focused on sales so you could actually pay your staff.

One year later, your business is starting to run except for one small detail: you never have any idea how much money you’ll make until the end of the month. You are certain tax filing is going to be a nightmare.

This very common story is why accounting is such a popular service for business owners. Accountants help you:

• Keep accurate records

• Turn those records into usable reports

• Make sure the financial side of the business follows accounting best practices 

At FlowFi, we connect business operators of all shapes and sizes with our roster of highly-vetted accounting experts to help them clean their books and make sure they understand how much money they have on any given day.

We decided we’d make this handy guide to explain all the key tasks accountants can handle at small businesses and how they can benefit your business.

Also worth reading:

How much does an accountant cost?

23 Small Business Accounting Tips

Tasks Accountants Perform For Small Businesses

Bank reconciliations

One of the most important tasks for accountants is matching bank transactions to the books so nothing goes missing and duplicate transactions get caught. This is one of the fastest ways to prevent quiet, compounding errors—especially when you use multiple accounts, cards, or payment processors.

Month-end close

Month-end close includes bank reconciliations as well as any other tasks necessary to know exactly what money came in and out of the business every month. Usually it’s a mixture of expenses, payroll, platform fees, stock fees, and more.

If you can make the months close, then it becomes substantially easier to close at the end of the year.

Month-end close, incidentally, is one of the most highly requested bookkeeping services at FlowFi. 

Read our blog on why books always get closed in the next month.

Financial statements

Financial statements include your profit & loss statement (P&L), balance sheet, and (when needed) cash flow reporting. These are all necessary reports for taxes, getting loans, selling your business, or getting investors.

Chart of accounts

A chart of accounts is a master list of every financial account used by your company. These are divided into assets, liabilities, equity, revenue, and expenses. Charts of accounts create a code system for categorizing transactions into each category, usually starting with 1000 and ending in 7999.

These are necessary to create as your business becomes more financially complex, as it makes it easier to pull data for reports.

Catch up/Clean up

Catch up clean up is FlowFi’s undisputed most-requested accounting service. See what we offer here.

Catch up and clean up is for businesses who are behind on their books and need to wade back into past transactions to make them accurate. It entails exactly all of the dirty work you’ve been dreading like dredging up old receipts and emails.

This service varies drastically in its pricing and time commitments depending on how many months you’ve been unable to close the books and how complicated they will be to put back together.

Accounts Receivable/Payable(AR/AP)

AR/AP is our third most requested accounting service at FlowFi. See what our experts can offer you here.

Accounts Receivable improves invoicing and collections. It includes how you track who owes you money, how long invoices sit, and where follow-ups fall through the cracks. Better receivables means you actually start earning the money it says you’re earning on paper.

Accounts Payable is organizing bills, payment timing, and vendor obligations so you avoid missed payments and paying vendors too early when cash is tight. In many businesses, simply tightening payables improves cash flow without “making more money.

Payroll Coordination

Payroll coordination is a complicated way of saying “making sure employees get paid on time, correctly, and that it’s recorded correctly on the books.”

It can be pretty simple if your employees are paid flat rates and complicated if they are paid hourly or have commission bonuses. It can also become more complicated as you run payroll across different states.

Payroll Coordination is sometimes run by an HR expert and sometimes by an accountant.

We have a blog on how payroll management works if you’d like to read more on the subject.

Sales Tax Tracking

This is probably the most self-explanatory of all accounting tasks. Essentially, it is keeping track of how much was sold in each taxable region and making sure the correct sales tax was applied

Sales tax is especially relevant for Ecommerce businesses or any type of retailer or service business with multi-state sales. Generally, you need to think about sales tax in any region where you meet the following criteria:

• Physical presence: You have an office, store, warehouse, inventory, or remote employee in that state.

• Economic threshold: Your sales revenue or transaction count has crossed a specific limit set by a state, such as $100,000 in annual sales or 200 separate transactions.

Expense policies

Expense policies set practical rules for what counts as a business expense, how to document them, and how to keep reimbursements clean.

These are especially important as you start hiring employees and physically meeting with clients. Neither you nor the IRS wants to see employees renting room service at a five-star hotel on the company credit card.

Our experts can help you set up expense policies as part of tax prep services and as part of our fractional HR services.

Cash Flow Tracking

If you sell T-shirts that can sit in a warehouse for five years without getting damaged and you only sell 100 a month, why buy 300 new shirts if you know you’ll be low on cash for three months?

Cash Flow tracking probably takes second place for the most requested FlowFi accounting service. Cash flow is purely tracking how much cash your business will have available to use at any given time.

Especially in businesses that require large amounts of goods purchasing (retail, ecommerce, restaurants), cash flow is one of the most important categories to have right. 

Key Productivity Indicator (KPI) Modeling

Good operators don’t just pull KPIs out of thin air. Most of them consult with their CFO (or fractional CFO) to track which financial metrics are most important for the business and how to use them to measure employee and business performance.

These figures aren’t always the most obvious to a layman for example:

• Discount Capture Rate: The percentage of early-payment vendor discounts you successfully claim versus what’s available. 

• Rule of 40: A metric combining a company's growth rate and profit margin. If the sum is 40% or more, the company is balancing growth and profitability sustainably.

• Cash Conversion Cycle Velocity: How fast cash moves through inventory, sales, and collection.

Forecasting

This goes hand-in-hand with KPIs as an advanced accounting task often left to position like CFOs.

Forecasting is the difficult task of guessing how to manage money today to prepare for upcoming events in the future. For example:

• Seasonal changes in spending

• New hires

• Price adjustments

• Inflation

• And more

Tax prep support

Often, accountants are called in for tax preparation and support. This includes keeping financial records organized and coordinating with tax filing so year-end doesn’t become a scramble. Tax prep accountants are notably not the same thing as tax filers. They are in charge of making your communication with your tax filing service as smooth as possible.

Get a Fractional Accounting Expert For Any and All of the Above at FlowFi

Behind on your books? That happens to everyone. We created FlowFi to connect owners like you with industry-specialized accounting experts quickly and based exactly on your needs/pricing.

Here’s how it works:

• You sign up for a quick, free 15-minute assessment call with our team and fill out a questionnaire.

• Our team puts together a plan based on your needs, then uses 50+ data points from our assessment to match you with one of hundreds of highly vetted accounting experts based on your pricing, complexity, and even work style.

• Your expert onboards to your business in days and helps you get your accounting in order.

Ready to get started? Fill out the form below, and we’ll send you a message within hours.