Small business accounting: Be brave and trust the professional

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Dealing with accountants and bookkeepers is a massive pain point for many small business owners, largely because they don’t really understand what’s happening behind the scenes. Small business accounting is a necessity, but handing off the books and financial details to another individual could result in fear and dread. Considering their crucial importance to the overall health of your business, however, this is a dangerous mental road to go down.

While low-key fear, uncertainty and doubt regarding accountancy in general is understandable at first, it’s not something you should be living with in the long-run.

In this piece, we’ll help you get a grip on small business accounting by offering a simple, four-step sequence you can use to introduce some sanity to the situation and lower your overall terror threshold.

Let’s begin by bringing some background issues into the light.

1. Name your fears.

Small Business Accounting Fears]

While weekly or monthly financial concerns, such as making payroll, will be crystal clear for most entrepreneurs, wider issues tend to get bundled up in a big bag of generalized worry labelled Money. Look inside that bag, and you’ll see a host of people such as accountants, tax authorities and bank managers all jostling for space.

In order to have any sort of sane relationship with your accountant, it’s important you clearly label your current fears.


Start by simply grabbing a blank piece of paper and answering the following question:

What am I really worried about with my accountant?

Answers will vary here, but all will be instructive. Some people will realize the real fear point lies elsewhere in their business. Others will be able to hone in on potentially specific action items around their finances that can usefully be discussed down the line. Others still will realize it’s actually the accountant who is generating most of the fear.

It’s worth briefly dwelling on that final point. As with all other professions, there are both good and bad accountants. You may well be dealing with the latter, so don’t be blinded by jargon and bluster. If you’ve sat down, thought about it, and decided you fundamentally don’t like or trust your accountant, get a new one — it’s that simple.

2. Review your recent numbers.

Having clarified your emotions, it’s time to get some numerical perspective. The simplest way to do this is by pulling together some key numbers for the last three to five years. Again, a piece of paper is all you need here. To put things in the simplest possible terms, you want to have a clear idea of what happened each year along the following lines:

  1. How much money did both myself and my business bring in?
  2. What were the total expenses of both myself and my business?
  3. How much tax did myself and my business pay?
  4. How much profit did myself and my business make?

These are basic questions for small business accounting, but a staggering number of entrepreneurs and owners will not be able to answer them off-hand. If you haven’t been closely monitoring the books or taking an active role in your filings to date, you’ll almost certainly have to do some digging to get your hands on them.

Small Business Accounting Calculator

The place to start is with your yearly returns as filed by your accountant. If this is your first time actually studying them, begin by reviewing the basics. The small business section of the IRS site is also your friend here. If your life is suddenly starting to dissolve into a world of confusion and pain at this point, don’t panic! You’ll be getting some expert assistance shortly.

3. Book a meeting.

By this stage, you either know roughly where you are or at least have a decent grasp on what you don’t know. It’s time to talk to one or more accountants. Assuming you don’t have a genuinely bad feeling about them, start by visiting your current accountant. Explain your overall situation, and say you’re trying to get clear about two things:

  1. The answers to our four fundamental questions above.
  2. How you can be more actively involved in your own finances in the future.

The answers you get will speak volumes. You should expect a clear breakdown of the basic numbers and what they mean, as well as practical tips on how best to prepare for key parts of the financial year. Remember, you’re paying for this time – if all you’re getting back is bluster, jargon, brusqueness or any combination of the three, it’s time to seek a second opinion.

4. Commit to understanding the basics.

Once you’re over the initial fear hump, it’s time to commit to some long-term learning about small business accounting. Accounting Coach is an incredibly affordable investment that will have you up and running on the basics of your business in no time.

Small Business Accounting Gardening
A little learning goes a long way when it comes to the numbers that run your business.

The slim volume, Financial Intelligence for Entrepreneurs: What You Really Need to Know About Numbers, is also a highly recommended resource. Study both our suggestions slowly and carefully, and you’ll soon be having worry-free, adult conversations with your accountant down the line!

In conclusion

Trepidation around accountancy is entirely understandable as an entrepreneur, but it’s a nettle that has to be grasped sooner rather than later to effectively run your business. Our simple, four-step process will get you over your initial fears and set you on the path to independent authority down the line. Let’s review the steps to close:

  1. Name your fears. Actually listing your concerns in writing brings welcome clarity.
  2. Know your basic numbers. A little digging is a small price to pay for solid perspective.
  3. Book a meeting. Kickstart your new relationship with your accountant with a face-to-face session to clear the air.
  4. Commit to learning. Knowledge is power, and you’re more than capable of mastering the basics over time.

Don’t let small business accounting scare you. From here on out, you can prepare yourself to field the world of bookkeeping and accounting with these easy steps.

Image by: kreg.steppe via / CC BY-SA