How and when should I change accountants?
As your business changes and grows, you may wonder how to best manage your bank accounts for the business, or how to control and monitor company expenses, perhaps you feel like it’s time to change your accountant. Thankfully, the process of changing accountants does not need to be complicated. The switch can happen with a minimal amount of effort and disruption.
Here, we take a look at how, why and when it may be right to change accountants…
Why change your accountant?
Changing your accountant might be the right choice for your business. Perhaps your accountant has changed the way that they operate, or maybe your business is no longer compatible with their offering or model.
If you’re unsure as to whether to switch accountants, ask yourself the following questions:
1. Are you happy with the level of service that you are currently receiving from your accountant?
It’s important that you have a good relationship with your accountant so that you can work together to solve issues in the business as they arise. If you don’t feel as though you can do this, perhaps it’s time to look elsewhere.
2. Do you feel your accountant is good value for money?
Just as you would strive to ensure value for money in other areas of your business, consider whether you are getting what you pay for from your accountant. Compare their level of service and packages to what others have on offer and decide what’s right for the company’s needs.
3. Are company tax returns completed to a high standard and in good time?
Remember that you are paying your accountant to look after the accounts for you. If they are taking your focus away due to last minute tax returns, then you know that something isn’t right.
4. Does your accountant understand the needs of the business now and the plans for the future?
For the relationship between a business and its accountant to thrive, both sides must be clear about the company’s needs. Not just now, but also in the future.
5. Has your business outgrown the accountant?
Outgrowing an accountant is one of the most common reasons for a business to change provider. If your company has grown and left your accountant behind, look around for somebody who can manage your growing requirements appropriately.
6. Has your accountant outgrown you?
Just as your business may change and grow, your accountants may have too. If you feel as though you are no longer essential to them, or they have become too busy to give you the level of attention your business requires, it’s a clear sign to reassess.
What to think about when changing accountants
If you’ve decided that it’s time to change accountants, think carefully about when it will be the best time to arrange a handover between the current accountant and a new one. Your financial year-end wouldn’t be ideal timing, so try to aim for a period when there is as little financial activity as possible taking place.
Check your agreement
Make sure there are no special conditions in your agreement with the existing accountant that would prevent you from switching. Ensure that all loose ends are tied-up and that you settle any outstanding bills. This way, it allows for a smooth transition from one accountant to another.
How to switch accountants
To ensure the process of changing from one accountant to another goes as smoothly as possible, try these simple steps:
- Make the current accountant aware in good time that you intend to move on. You will also need to permit them to hand over any paperwork to the new accountant.
- Request a disengagement letter. Your existing accountant will need to provide this professional document detailing the work they have completed thus far, in addition to other crucial dates and information.
- Arrange a professional clearance letter. Your new accountant will prepare this letter for you to give to your outgoing one. It will request professional clearance for them to take over the management of the business’ accounts, confirm that there are no professional reasons as to why they shouldn’t take you on as a new client and request the transfer of all relevant documents.
- Establish a new signing authority. The final step is to assign authority for the company’s tax affairs to the new accountant so they can file future tax returns on behalf of the business.
Changing your accountant is a relatively simple process, and it is worth checking the market to ensure that you are receiving a service that suits your business’ needs. A good accountant can save a company money, and deal with matters such as tax, payroll, book-keeping and auditing. When a business relationship is this important, it’s worth investing in the right one.