How to get the most from the five levels of business accounting services

Distinguishing between bookkeeping, accounting, consulting, advisory, and attestation services.A business accountant typically provides up to five distinct levels of service. While each accountant and client business may customize the service arrangement to meet their own specific situation, it helps to begin with a recognition that an accountant’s services fall into these general categories:

  1. Bookkeeping and compliance – meeting the requirements of running a business. This is increasingly an automated function but is still labor intensive.
  2. Representation – acting as attorney in specific matters like tax disputes. A person with experience in procedures and perhaps a legal background is best suited.
  3. Technology/consulting/advisory – making the best use of available resources, environment and opportunities. This has been the primary function of the CPA profession in the past decade (in addition to #5 below).
  4. Coaching – focus on clarifying strategy and goals. Look for a coach with specific training and certification in the field of business or executive coaching.
  5. Attestation – compilation of financial statements, reports, reviews and audits for an outside party in accordance with established standards. This is a service provided by Certified Public Accountants and tends to be expensive becasue of legal, industry and peer review requirements.

Accountants tend to distinguish themselves based on industry experience, training, professional credentials, industry or subject matter focus, and geographical focus. We notice that small business accountants tend to “wear all hats” primarily because business owners are less likely to hire a team of accountants that specialize in various disciplines. For that reason, it makes sense for business owners to start out with an accountant who has as broad a basis of services as possible. As the business grows it makes more sense to use multiple accountants with different specializations.

By focusing on clarifying the accounting services that will provide the greatest value first, then the second step of matching a business accountant to fit those specific requirements should become easier. In some cases, services can be combined into one contract. In other cases, multiple providers or step-by-step services are better or even required.

Business owners are encouraged to discuss and consider the value of each of these five types of service and first design a service package that combines to create the greatest value for the firm. Then, with that package of service requirements in mind, consider the accountant’s fit to that requested combination for the best overall value.