The majority of accountants available for hire are generalists. On a typical accountant’s client list you may find a few contractors, real estate holding entities, retailers, a couple of non-profits, a manufacturer or two, and a smattering of other eclectic tax filings. For the most part, these accountants will be able to adequately service your account, assist you with compliance, and provide general business advice. What they cannot do is provide you with insight and advice on the nuances of your business, its operations, its regulatory environment, and assist you in driving real, positive bottom line results. Most accountants in business today gained all of their business acumen on the job by learning from their clients instead of being a resource to them. For unsophisticated business owners who are only interested in maintaining the status quo, this may be enough. It is not sufficient, however, for entities that are actively focusing on growing their businesses, developing operational efficiencies, and maximizing their bottom lines.
Finding an accountant that functions as a business analyst will significantly benefit you and your business. What differentiates a business analyst from an accountant? Unlike a typical accountant that knows a little about a lot, a business analyst has a significant level of knowledge within a specific industry or about a specific issue. This concentrated knowledge allows them to truly understand your business and guide you through industry-specific issues and pitfalls, provide insight about improving operational effectiveness, and help you to maximize your overall profitability. If your accountant knows less than you do about your business and industry, how can they possibly serve as an effective resource? For instance, if you were in e-commerce, you would want an accountant that understands multi-state nexus and sales tax rules, software licensing issues, research and development tax credits, corporate liability issues, and real-time inventory, to name a few. Anything less would not be worthwhile.
Business analyst accountants can also help you to be proactive when it comes to compliance. A traditional accountant may only become aware of certain filing requirements when you receive a notice in the mail, which is often accompanied by non-filing penalties and interest. A good business analyst will know your business’ filing requirements inside and out and will be able to assist you in making all of your necessary filings on time without the annoying notices and added costs of penalties and interest.
So how do you determine if your accountant is a business analyst or just an accountant?
- Ask industry-specific questions to gain an understanding of the accountant’s knowledge base with your industry
- Determine what other clients they serve in your industry and speak to their clients to determine the depth of their knowledge
- Find out what trade associations they belong to that are germane to your industry
- Determine if their knowledge expands beyond fiscal into operational and compliance related issues
An accountant that is also a business analyst may be a bit more expensive than a typical accountant, but the benefits they will provide and the positive impact they will have on your business operations will usually far exceed the incremental cost.