5 Year-end Questions For Your Small Business Accountant

questions to ask an accountant for small business

Having an accountant is one of the best decisions you can make for your small business. Keeping financial records updated and ensuring that your filings are compliant with local and state regulations are critical to your business’ health. 

With that said, it is important that you communicate well with your accountant and know the right questions to ask at any point in your operations. The fourth quarter is unique because it’s toward the close of the financial year, so there will be discussions about your company’s overall performance and plans for the next year. 

If you are considering a new equipment purchase or an expansion and are thinking of applying for a loan, your accountant’s insights will help greatly in weighing your options. Here are some questions to ask an accountant for your small business to make your next quarterly meeting more informative and meaningful.

5 Questions To Ask a CPA for a Small Business at Year-end

Knowing the right questions to ask an accountant helps in keeping you informed about where your business stands financially and if there are any bottlenecks that might be affecting your growth. If you’re closing out the fourth quarter with plans to take out a business loan as you welcome the new year, the information that your accountant will provide will be valuable. 

Here are five questions to ask your accountant as you close Q4 and prepare for the next financial year. 

1. How is my business’ financial health?

A large part of your accountant’s job is ensuring that your business is healthy enough to fulfill current and upcoming obligations. Your accountant should be able to present data that detail where your business is at financially, whether or not it is actually earning or spending more than it should, and if you have the capacity to continue operating well into the next year. Having this information will give you a good idea of where your profit margin is headed when the season closes out.

2. Can you provide insights on my cash flow?

Cash flow refers to the money you have now that’s available to spend or invest without hurting your bottom line. It is the movement of funds into and out of the company, and your accountant will have complete details about where the money has gone and for what purpose. A positive cash flow means you have the capacity to maintain overhead expenses and pay off any investments or debts. A negative cash flow indicates that your business is becoming less liquid and might need to cut corners or apply for credit or a loan soon. 

3. What is my projected net revenue, and what factors affect its increase or decrease from the previous quarter and year?

Knowing how much you expect to gain in the fourth quarter will help you make plans for the first quarter of the next financial year. Your accountant will provide you with details on your gross and net revenue by comparing your business’ performance with the previous quarters or the fourth quarter of last year. By examining your financial statement, your accountant can also identify what is causing an increase or decrease in your finances, so you can be ready with a plan before the year ends

4. How much have I spent so far?

One of the most critical accounting questions that small business owners should ask is whether their spending is commensurate with income. Startups tend to be loose with expenses thinking that it’s an investment in their future growth. However, if you’re spending too much without bringing enough sales in to balance things out, your accountant will be the first to give you the real score and stop you. 

5. Do you have any advice based on my financial statement?

Your financial statement, which your accountant produces quarterly and yearly, says a lot about your business’ health and performance. You could be thinking that your business is earning but your financial statement might state the opposite. If such is the case, you might want to consider the help of a lending agency to ensure that your company remains afloat. 

Dwindling revenues are not the only reason to consider a loan. Your accountant might find on your financial statement that a certain service offering has been consistently performing way better than the others in your roster. This could inspire you to invest in new equipment, or even set up a new branch, to increase capacity or enhance efficiency

Is Your Business Ready for Growth? Secure a Loan from LendThrive

The accountant’s job is to ensure that your financial records are in order and tax filings are compliant with the law. Because they have a keener eye when it comes to how much your business is actually earning versus what you think you are getting, they will have a more calculated view of your readiness to take on more responsibility. 

While the decision to invest further or hold back is entirely up to you, knowing the right questions to ask an accountant, especially toward the end of the financial year, will earn you valuable insights on how best to drive your business in the months to come. 

When you are ready to take the next step with a loan that will support your growth, look no further for advice than experts at LendThrive. We provide small business owners with the opportunity to better manage and scale their ventures with fixed rate business loans that are designed to see you win. Plus, our Rate Reduction Rewards program assures a declining interest rate policy that will leave you with more money in your pocket when you make on-time payments.

Talk to our team to learn more about the different options that are available to you or apply for a loan today.

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