Is Your Accountant Keeping You Accountable?

The Numbers Don’t Lie — Unless They’re in the Wrong Place

Misclassified assets, understated liabilities, and unclear margins can distort your view of performance — here’s how to spot it.

How to make sure your financial reports tell the real story.

Most business owners depend heavily on their accountant, and rightly so. They’re the trusted guide for tax, compliance, and reporting. But here’s the uncomfortable truth: not every accountant gives you the clarity you need to make good business decisions.

It’s not about competence, it’s about focus. Many accountants are compliance-driven. Their job is to make sure your BAS and tax returns are correct. But strategic reporting , the kind that helps you actually understand how your business is performing , requires a different level of detail and scrutiny.

If you’re reviewing your financials and they don’t help you answer the question, “How healthy is my business, really?”, it’s time to look closer.

Are your assets classified correctly?

Take a look at your Balance Sheet. Under “Current Assets,” you should see items you can convert to cash within 12 months , things like receivables, inventory, and cash itself.

But we often see Current Assets inflated with items that aren’t current at all , things like security deposits, shareholder loans, or long-term prepayments.

The result? Your current ratio (current assets ÷ current liabilities) looks healthier than it really is.
You might believe you have strong liquidity when in fact, your short-term cash position is tight.

Are your liabilities understated?

It’s just as important to check what’s sitting under Current Liabilities.

If your loan repayments due in the next 12 months are buried in “Non-Current Liabilities,” you’re understating your short-term obligations.

That means your cash flow forecasts and debt-servicing capacity are being misrepresented, and decisions based on that information (like taking on new commitments or hiring staff) could backfire.

Do your reports show your true Gross Margin?

A surprising number of accountants don’t present a clear Gross Margin in the Profit & Loss.
They’ll lump direct costs together, or classify expenses inconsistently.

Without an accurate Gross Margin, you can’t:

• See your cost of goods sold (COGS) trends
• Track pricing efficiency
• Identify which products or divisions are driving profit
• Benchmark your results against your industry

Gross Margin is the heartbeat of operational performance , if it’s not visible or reliable, you’re flying blind.

Are you seeing the real story behind “profit”?

Your accountant might report a healthy “net profit,” but how does that translate to cash in the bank?

Depreciation, accruals, and timing differences can distort reality. Ask for a cash flow statement or “cash-adjusted” view of your results. If your profit looks good but your cash balance keeps falling, you need to understand why.

Similarly, check whether owner’s wages, drawings, and tax payments are factored into those results. Many reports exclude them, leaving you with an inflated sense of profitability.

Are your reports timely and trend-based?

A set of financials that arrive months late , or only at year-end , are almost useless for management purposes.
You need monthly or quarterly reports that let you spot changes early, not after the year is over.

Better yet, your accountant should help you track trends, not just produce snapshots:

• Are sales trending up or down?
• How is your overhead ratio moving?
• What’s your rolling 12-month profit and cash balance?

Without trend data, you’re driving while looking in the rear-view mirror.

The bottom line

Your accountant is a key part of your business team , but it’s your business, not theirs.
You don’t have to understand every journal entry, but you should absolutely understand whether your reports reflect reality, drive better decisions, and show your true performance.

So next time you review your accounts, ask:

• Do these numbers make sense to me?
• Are they helping me make decisions or just meet obligations?
• Am I confident I’m seeing my business as it really is?

If the answer isn’t a clear “yes,” it’s time for a deeper conversation , or a fresh perspective.