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Updated: April 29, 2024

5 questions small business owners are afraid to ask their accountant (but really should)

Published By:

Janet Berry-Johnson, CPA

Just about every small business owner has questions or concerns that keep them up at night. Running a small business can be daunting, from navigating the complexities of taxes to dealing with payroll cash flow.

 

Fortunately, they have you — a knowledgeable, trustworthy advisor to answer their questions. But are they actually sharing what’s on their mind with you?

 

According to OnPay’s research, around 34 percent of small business owners have little communication with their accountants outside of tax time.

 

If your clients aren’t bringing their questions and concerns to you, they might be worried about sounding uninformed in front of a professional. Furthermore, they may have concerns that fees for each email or phone call will add up quickly, or they may simply be unaware that you can (and want) to assist with issues other than financial statements and tax preparation.

 

So, let’s take a look at some of the questions your clients might be afraid to ask, and consider adding them to the agenda of your next client meeting or phone call. You just might wow your clients with your understanding of what’s on their minds.

 

What if I missed the January 31 deadline to issue W-2s?

There are several reasons why a small business owner might miss the deadline to issue W-2s to their employees. For example, they may be dealing with unexpected events or emergencies, such as a family illness, which causes them to fall behind on their administrative tasks. Or they might be buried with work and forget or overlook the deadline.

 

Even though your clients might be afraid to discuss this or other missed deadlines with you because they’re worried about penalties or fines, every accountant knows the head-in-the-sand approach is never the right one—especially when you’re dealing with the IRS.

 

So ask about their W-2s, 1099s, payroll tax returns, and other time-sensitive filings. This might even lead to a conversation about how you can help with payroll, informational returns, and other administrative tasks so they can avoid similar issues in the future.

 

What if I don’t have all my financial records?

It’s not uncommon for small business owners to find themselves missing financial records. For example, employee payroll records might get lost in a fire, natural disaster, or data loss event. In some cases, expense receipts might get thrown out accidentally. And, with so many items on their to-do list, others may forget to keep track of the miles they drive for business.

 

The thought of not having all their financial records may cause clients to break out in a cold sweat, as it can impact everything from tax filings to audits. Furthermore, customers might feel embarrassed or ashamed to admit that they don’t have all of their financial records in order, which adds to their stress and anxiety. The good news is that you can help them fill in the gaps.

 

Help ease the situation by discussing with your clients how they can recreate missing documents, such as reviewing calendars to document mileage, documenting expenses with bank and credit card statements, or tax filings for payroll tax figures.

 

This conversation can also open up a well-timed opportunity to advise them on better methods for maintaining records and documenting expenses. For example, you might recommend working with a payroll service, using an expense management system, or giving mobile apps that automatically track mileage a try. By going above and beyond to recommend resources that provide value, you can strengthen your relationship with clients and provide peace of mind.

 

What are some little-known tax deductions that I should take advantage of?

Reducing tax burdens is practically a universal goal for all small business owners. Yet it’s all too common for businesses to overlook the deductions they’re eligible to take and not ask their accountant what they might be missing.

 

So why might small business owners avoid asking their accountants about tax deductions? For one, they might be worried that their accountant will think they’re trying to “game the system” or claim tax write-offs that aren’t legitimate.

 

Of course, accountants know the reality is that the tax code is complex and constantly changing—even for tax advisors with years of experience. Asking questions about deductions and tax planning shows clients are proactive about managing their finances and staying informed.

 

What are my chances of getting audited?

When the IRS announced a plan to hire nearly 20,000 new employees and deploy new technology to improve tax enforcement, it set many small business owners on edge. For years, small business owners had less than a 1 percent chance of being audited. Was that about to change?

 

Even the most honest and well-meaning small business owners might fear that mistakes on their tax returns will trigger a time-consuming, stressful, and potentially expensive IRS audit. You can put your clients’ minds at ease by emphasizing that audits are still relatively rare and typically occur only when there are clear red flags or issues with a tax return.

 

Plus, on the off chance they are audited, you can help them prepare for and navigate the process, which can help mitigate some of the stress and uncertainty. With you guiding clients on providing relevant documentation and explanations to the IRS, they can rest easy knowing they’re better equipped to handle an audit if it does occur.

 

How can I grow revenue and/or better manage cash flow?

Small business owners are always looking for ways to grow their revenue and better manage cash flow. After all, the ultimate goal is to make a profit and ensure the business’s financial stability.

 

Despite well-meaning efforts, many small business owners struggle or are simply unsure where to start to achieve these goals. And, if they only speak with you once a year around tax deadlines, they may realize your valuable advice (and guidance on improving their finances) are just an email or phone call away.

 

If you’ve been working on taking on more of an advisory role with clients, working with clients to interpret their financial statements and identify key performance indicators (KPIs) around revenue and cash flow is a great place to start. Helping your clients with forecasting, planning, and anticipating future challenges or opportunities can help them lay a solid foundation for long-term success and make you an invaluable resource in their business.

 

Answer the questions clients are afraid to ask

By getting ahead of the questions that may be lingering in the minds of clients, you position yourself as a trusted advisor (and proactive partner) that keeps customer needs top-of-mind. In addition, these conversations may open the door to new services your practice can offer, leading to more robust relationships with your clientele and the revenue growth that is sure to follow.

Talk to us and see how easy it is to offer payroll services your way.

Janet Berry-Johnson, CPA is a freelance writer with a background in accounting and income tax planning and preparation for small businesses and individuals. She enjoys helping people make sense of complicated accounting and income tax topics. She lives and works in Omaha, Nebraska. Visit her website at www.jberryjohnson.com.