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3 Signs You've Outgrown Your Current Accounting Firm

April 21st, 2023 | 6 min. read

By Brian Paulson

Humans are creatures of habit. We gravitate to routines, consistency, and stability. So once we’ve found an advisor - like a banker, insurance agent, or accountant - we tend to stick with that person or company over time because it’s comfortable.

However, keeping the same accountant could be a big financial mistake for smaller companies experiencing growth. As you expand, your financial needs and concerns are going to be dramatically different than they were even a year ago.

CSI Accounting & Payroll has worked with thousands of small business owners over the past 50 years. A common issue we've come to recognize is that sticking with an accountant you've outgrown costs more than you’d expect. A lower price tag can easily be outweighed by missed opportunities.

To ensure that doesn’t happen, here are three signs that your accountant is no longer keeping pace with your company.

A small business owner's calculator and spreadsheet figuring out if they've outgrown their accountant

The Three Signs

1. They can’t help you when you need to borrow money to expand your business.

When you need to take out a business loan or line of credit, your bank is going to ask you for a copy of your tax return from the previous year. This shouldn’t be a problem - unless your return hasn’t been filed yet.

A lot of accounting firms put extensions on filing returns because they get overwhelmed during tax season, so if you’re trying to take out a loan before the October 15 extension deadline, you may be out of luck. This is especially a risk if the firm gets bogged down by handling anyone's personal taxes instead of specializing in small business owners.

Your bank will also want copies of your most recent financial statements, but if your accountant isn’t doing monthly profit and loss statements for you, you may have no financial statements to show. If your accountants can’t give you this information, it’s a sign you need to upgrade your financial service to monthly accounting

Learn more about ways an accountant can help you secure a small business loan.

2. They can’t provide advice for your business plan or expansion goals.

As your company grows, you need more from your accountant than just number crunching and basic compliance. Most annual accounting firms will provide basic tax services, but if you have aggressive growth goals, you need more of a partner.

Monthly accountants are able to offer much more value than annual accountants due to working with your financial data more frequently and at a larger depth. The right service will have the expertise, resources, and industry knowledge to:

  • Guide you through important, time-sensitive decisions
  • Help you see growth opportunities year-round
  • Proactively respond to new tax laws

Of course, they can do much more, too! Read more about the different types of advice a monthly accountant can offer by clicking the image below:

3. They file something incorrectly because it's too complex.

Getting an audit notice from the government is miserable enough, but it’s even worse if you find out your accountant is to blame - especially if that accountant is a close friend or family member, as is often true for small businesses. Avoiding mistakes can be challenging, and dealing with sensitive family or friend dynamics can add to the problem.

Even if your accountant is an outsourced annual tax professional, you could be missing out on significant deductions or credit opportunities because they aren't in touch with your business year-round. If you're not getting all of the benefits you deserve, it might be time to find an accounting solution that's more in-depth and a better fit. 

Regardless of who does your taxes, you should know some basics of how to analyze your business's tax return - especially if you think you're noticing red flags or didn't end up owing the amount you were estimated to owe.

Expand Your Accounting Service

Sometimes, business owners find themselves continuing to work with accounting solutions that don't offer enough advantages. Accounting should be treated as an investment rather than an expense.

As your business continues to grow, your accountant should be someone you check in with about any major decisions. They should be able to get your work done on time, have the right knowledge and connections to help you, and be able to offer timely advice. The right accountant will save you money and set you up for long-term financial success.

If you think your business may be ready for monthly accounting, why not consider CSI Accounting & Payroll? We have the expertise and resources to help with the three points above - and much, much more! Click the button below to schedule a free consultation, and let's find out if we're a match.

Not ready to talk? That's okay! First, learn more about how to change accountants.

Brian Paulson

Brian began working at CSI in 1996, and he purchased the business in 2002. As Owner, his primary role is in the management and growth of the firm. Since 2002, the firm has more than quadrupled in size. In 2009, Brian started CSI’s payroll service to complement CSI’s accounting and tax services. Brian received his Bachelor’s degree from the University of North Dakota, with a double major in Accounting and Financial Management. He’s a member of both the National Society for Tax Professionals and the National Society for Accountants, and he serves on the board of directors for the Professional Association of Small Business Accountants, where he was once president. Brian also serves on the business advisory council for Opportunity Partners, an organization that helps people with disabilities find employment. He’s also contributed to several business books, including Six Steps to Small Business Success and The Lean Mean Business Machine. Fun Fact: To help put himself through college, he used student loans, delivered pizzas, and worked summers in a salmon processing plant in Alaska.