What to expect from your business accountant

Managing a small or medium-sized business (SME) entails a range of financial obligations and decisions. A business accountant is one of your key allies in navigating these challenges. But what exactly should you expect from your external accountant, and where do their standard services end?

In this article, I break down the core roles and responsibilities of a business accountant, what’s typically covered in their scope of engagement, and which tasks sit outside standard practice as added services when required.

Historically, the primary role of an external business accountant has been to ensure that your business stays compliant with financial regulations. This foundational work is still a crucial part of an accountant’s responsibilities today. You can expect your business accountant to handle the following core services as part of a standard engagement:

• Tax compliance and BAS lodgements: Preparing and lodging your Business Activity Statements (BAS) for GST, as well as completing annual tax returns for the business (and sometimes for you as the owner). They ensure you meet all ATO deadlines and obligations, helping you avoid penalties.
• Financial statement preparation: Even if a small or medium-sized business isn’t legally required to produce formal financial statements, accountants usually prepare a Profit & Loss statement, Balance Sheet, and other reports at least annually. These statements provide a clear picture of your business’s performance and are often required for purposes such as obtaining bank loans or investor reporting.
• General bookkeeping oversight: While day-to-day bookkeeping might be handled internally or by a bookkeeper, your accountant will typically review the books for accuracy. They’ll ensure transactions are properly recorded and may help adjust entries at year-end to align with accounting standards.
• Ensuring regulatory compliance: A good accountant keeps you informed about key compliance changes that affect your business. This can include updates to superannuation rules, changes in payroll tax or land tax laws, and new tax incentives or regulations. Essentially, they help you stay on top of the rules before those deadlines and changes become a problem.

These core services are generally covered by a fixed fee or monthly retainer that you agree upon in your engagement letter with the accountant. They form the baseline of what you’re paying for when you hire an external business accountant.

In the last decade or two, the role of a business accountant has evolved beyond just “bean counting” and lodging forms. Thanks to cloud accounting software like Xero and real-time financial data, accountants can now collaborate more closely with businesses throughout the year. You may hear firms discuss being proactive or offering business advisory services in addition to traditional accounting services.

What does “proactive accounting” really mean? In practice, a proactive external accountant will:

• Keep you ahead of deadlines and obligations: Rather than waiting for you to ask, they’ll remind you of upcoming lodgements (for example, quarterly BAS due dates or superannuation payment deadlines).
• Provide timely tax planning advice: Before the end of the financial year, they might suggest actions to optimise your tax position, such as purchasing needed equipment, making additional super contributions, or deferring/bringing forward income where appropriate.
• Update you on financial regulation changes: If there’s a new government incentive, a change in GST or payroll tax rules (which is a state government obligation and not associated with the ATO), or any compliance shift, a proactive accountant lets you know how it impacts your business.
• Be available for questions and guidance: Importantly, you should feel comfortable asking your accountant general questions throughout the year. A proactive accountant encourages open communication, answering queries like “Can I claim this expense?” or “What’s the best way to finance this asset?” as part of their service.

This kind of advisory input can greatly assist your business by helping you make informed decisions before things happen, rather than the accountant only looking at your numbers in hindsight. However, it’s also important to understand the limits of this advice. A proactive external accountant differs from an internal finance manager or CFO. They can guide you on financial implications and compliance, but they won’t usually step in to tell you how to run operational aspects of your business unless you engage them for that specific purpose.

Sometimes your business will need help beyond the standard accounting duties. It’s not reasonable to expect these extra tasks to be included in a normal accounting fee as they often require significant time and specialised analysis. Examples of additional services or “special projects” an external accountant (or accounting firm) can provide include:

• Detailed forecasting and budgeting: If you’re planning for growth or navigating a rough patch, you might ask your accountant to develop comprehensive financial forecasts, budgets, or cash flow projections. This goes beyond basic compliance reports and typically constitutes a separate advisory project.
• In-depth cost analysis and strategy: Perhaps you want to analyse the profitability of different product lines or departments, or you need a review of your pricing strategy. An accountant can certainly assist with this, but it usually isn’t part of the routine bookkeeping/tax service. It would be scoped out as a distinct consulting engagement.
• Virtual CFO or ongoing strategic consulting: Some SMEs opt to have their external accountant act as a Virtual CFO, attending management meetings, monitoring financial KPIs, and providing regular strategic guidance. This level of involvement is far outside standard compliance work. Essentially, you’re hiring the accountant in a fractional executive role, which comes with its own agreement and fees.
• Preparation for financing or sale: If you’re seeking a bank loan, investor funding, or preparing to sell the business, you may require specialised financial reports, business valuations, or due diligence support. Accountants are invaluable in these situations, but again, these activities aren’t covered under a normal yearly accounting contract and would be billed separately as special services.

It’s essential to recognise these additional needs and discuss them with your accountant in advance. Most accountants are happy to provide extra help; it’s a big part of how they assist businesses beyond the basics, but you should expect to approve a new quote or engagement for these projects

To avoid any confusion about what your accountant will do as part of their standard service versus what’s outside scope, always refer back to the engagement letter. This document, typically signed at the beginning of the relationship or annually, clearly outlines the services included, the responsibilities of both parties, and the associated fees. It’s essentially the ground rules of your relationship with your accountant.

Key points typically covered in an engagement letter for business accounting services include:

• The period of the engagement (e.g. the financial year 2025-2026).
• The specific services included: preparation and lodgement of BAS, annual financial statements, annual company tax return, maybe an annual tax planning meeting, and general business advice as needed.
• Services that are excluded or will incur additional fees if requested, such as special projects like budgeting, cash flow forecasting, business restructuring advice, or handling ATO audits beyond routine support.
• The accountant’s and client’s responsibilities include providing information by certain dates, maintaining confidentiality, and adhering to professional standards, among others.
• Liability and protection clauses, which often clarify that advice is given based on the information provided and within the scope of the engagement.

Reading and understanding this letter is crucial. If you’re ever unsure about whether something is covered, don’t hesitate to ask your accountant. As I often point out, “clients shouldn’t be afraid to ask questions”. General advice and answering those questions are usually part of the service when you’re on a fixed-fee agreement. If the request does become a larger piece of work, a good accountant will clarify that it falls beyond the normal scope and provide a proposal for the additional service.

A professional business accountant does more than just crunch numbers once a year. They act as a trusted advisor who helps you steer your business’s financial course, while ensuring you don’t run afoul of laws and regulations. To get the most out of this relationship:

• Communicate openly: Keep your accountant informed about major business decisions or changes. Even if they’re not your CFO, their early input can save you headaches later.
• Set clear expectations: Make sure you and your accountant both understand what’s included in your engagement. This prevents the “expectation mismatch” where you thought you hired a financial co-pilot, but the accountant thought they were just preparing a tax return. Clarity up front leads to less frustration for both parties.
• Take their proactive advice on board: If your accountant reminds you of a tax deadline or suggests a tax-saving move, treat it as an opportunity to benefit your business. They’re helping you be proactive.
• Recognise when you might need extra help: If your business is growing or facing new challenges, consider engaging your accountant for additional advisory services. It’s an investment in expert guidance that can pay off through better decisions and smoother growth.

When you engage a professional business accountant, you should expect a combination of compliance expertise, timely advice, and a supportive partnership, within the boundaries defined by your engagement. Business accountants assist your business by keeping it financially healthy and compliant, and by being there to answer the questions that come up along the way. At the same time, know that when you require more involved strategic input, it’s available as an added service when you need it. By understanding these roles and responsibilities, you can fully leverage your accountant’s skills and build a relationship that helps your business remain compliant, competitive and grow.