10 questions answered
Accounting FAQs
The accounting basics behind every good tax return: what an accountant does, cash versus accrual, the statements you need, and how long to keep your records.
Working with an accountant
- What does a small business accountant do?A small business accountant prepares and files tax returns, plans ways to lower tax, reviews or keeps the books, and turns financial statements into decisions about pricing, hiring, and growth.
- Do I need an accountant for an LLC?No, an LLC is not legally required to have an accountant, but most benefit from one.
- How do remote accounting services work?Remote accounting services run through a secure document portal, cloud bookkeeping software like QuickBooks Online or Xero, e-signatures, and video calls.
- What is a fractional CFO?A fractional CFO is a part-time chief financial officer who handles cash flow forecasting, budgeting, KPI tracking, pricing, and financing for a monthly fee instead of a full-time salary.
Accounting basics
- What is the difference between cash and accrual accounting?Cash accounting records income when money arrives and expenses when they are paid.
- What financial statements does a small business need?A small business needs three core financial statements: a profit and loss statement showing income and expenses, a balance sheet showing what it owns and owes, and a cash flow statement showing where cash came from and went.
- What is a chart of accounts?A chart of accounts is the list of categories a business uses to sort every transaction, grouped into assets, liabilities, equity, income, and expenses.
Records and compliance
- How do I separate business and personal finances?Open a dedicated business bank account and credit card, run every business transaction through them, and pay yourself with recorded transfers instead of mixing purchases.
- How long should I keep business records?The IRS generally says to keep tax records for at least three years after filing, seven years if you claim a loss from bad debt or worthless securities, and at least four years for employment tax records.
- Can an accountant help with an IRS notice?Yes, an accountant can help with an IRS notice by reviewing your account transcripts, explaining what the notice means, and drafting a response before the deadline.
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