The accountant who got your business through the startup phase isn’t always the one who gets you to $5 million — or $10M or $20M.
As your business grows, the inflection point usually comes when you need financing, are seeking proactive tax mitigation strategies or need to reward key employees to help retain critical talent.
This is when the gap between basic tax prep and true financial advisory can mean the difference between making informed decisions and expensive mistakes. If your CPA’s involvement hasn’t changed since year one, you may have outgrown the relationship.
Here’s how to tell:
1. They only reach out when they need something for your tax return.
You hear from them during tax season, but there’s no ongoing dialogue about tax planning or your business goals throughout the rest of the year. An advisory relationship should include regular touchpoints aligned with your business cycle and discussions about how today’s financial decisions impact tomorrow’s tax position.
What advisory looks like at Magone & Company: Quarterly check-ins, year-round tax planning and strategic conversations — not just April deadlines.
2. They give you historical data, not forward-looking insights.
Your profit and loss statement arrives with no context or interpretation. There’s no benchmarking against industry standards, no guidance on what to watch for next, and no proactive analysis to identify opportunities.
Here’s an example: We worked with a client on their business and personal returns. This client had previously been with a traditional tax-prep-only firm for the past three years.
With our deep knowledge of state tax laws, we were able to take advantage of that state’s law to exclude income in the state. This resulted in a tax savings of approximately $600,000.
That’s the distinction between an accountant and an advisor. Our advisory approach explains why your business margins are shifting, flags issues before they become problems and identifies which metrics deserve your attention.
What advisory looks like at Magone & Company: We’ll suggest proactive tax mitigation strategies, identify trends in your industry and offer data-informed insights to get ahead of whatever’s next in your business.
2. You’re asking strategic questions, and they’re giving you compliance answers.
When you bring major decisions to your accountant — like hiring employees versus contractors, or buying versus leasing a building — you get technical tax answers instead of strategic guidance. They’ll tell you both options are compliant but won’t help you evaluate which choice is better for your cash flow, growth trajectory or long-term goals.
What advisory looks like at Magone & Company: Actual analysis of your specific situation with scenario planning and concrete recommendations.
3. They have no experience with your next stage.
As you prepare for an acquisition or expansion, you need an accountant who’s guided other clients through these transitions. If your CPA hasn’t helped a business secure financing, navigate due diligence or structure equity arrangements, they can’t speak the language that banks and investors expect or anticipate the challenges.
What advisory looks like at Magone & Company: We’ve walked many clients through these scenarios, and we’ll make sure you know what to expect.
4. Your business is making decisions without their financial input.
You’re setting prices based on gut feelings. You’re hiring reactively because you’re overwhelmed. You’re making large purchases or considering expansion without cash flow projections. And your accountant hasn’t provided any input.
What advisory looks like at Magone & Company: Together, we’ll sift through relevant data and develop a plan based on informed insights, not guesses
Level up your CPA
If any of these signs resonate, take the time to evaluate whether your accounting relationship can really support your business as it grows.
- Is your accountant proactively suggesting tax strategies, or only responding when you ask?
- Do they understand your goals for the business, not just this year’s revenue target, but your three-to-five-year plan?
- Do they understand your business model, your margins and what drives profitability in your industry?
- Can they suggest operational improvements to improve productivity or reduce risk?
The advisors at Magone & Company can offer your business the guidance and support it needs for long-term success. To learn more, give us a call today at (973) 301-2300.
This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances