You won’t be the first, or the last to switch accountants. It’s a routine part of business, and one that accountants handle every day. The key is making sure the transition to your new accountant is as smooth and stress-free as possible.

In this blog we’ll guide you through the process of changing accountants, highlight common pitfalls, and show you how to avoid them.

Why would someone want to change accountants?

Wanting to change accountants is completely normal. You may find you loved your accountant when you first started your business, but now your needs have changed. And that’s completely okay. It’s usually time to consider looking for a new accountant when:

• There’s poor communication (for example, you have to chase them for a response)
• They lack expertise in your industry
• The fees have increased beyond reasonable inflationary measures
• You want a more proactive or strategic approach
• Deadlines are missed
• Record keeping feels non-existent
• You don’t feel confident in their service anymore

It may even be down to a lack of clarity on expenses you can and can’t claim. Whatever the reason – it’s important to look for a new accountant who can fix these issues.

How do I choose a new accountant?

So, you want to change accountants – and get it right. Here’s what you need to do.

Define your needs

The first thing you need to do is determine your needs. Are you looking for basic tax filing? Payroll services? Or an accountant that can also deliver strategic business advice? This is important to decide before locking yourself into any contracts.

Compare fees

This is important to do when you make any business decision. Sometimes cheap doesn’t mean poor service – and an expensive service doesn’t always mean five-stars.

Once you’ve determined your needs and found a list of accountants that can cater to them – compare the prices and the client reviews.

Check qualifications

Anyone can call themselves an accountant because the word isn’t regulated (believe it or not). But what they can’t do is lie about their qualifications. So, when you’re looking for a new accountant, ensure they’re an accredited member of one of the big professional accounting bodies or qualified from the likes of ACCA, AAT, or CIMA.

Check their software experience

Times are changing – and everything is going digital, including your bookkeeping (Making Tax Digital is proof of the government’s initiative to push everything digitally). Because of this, you should ensure your new accountant is proficient in cloud accounting and comfortable to work with your software. For instance, if you use Xero, Pandle, QuickBooks etc.

Ensure they have the right industry experience

If you’re a contractor, then hiring an accountant who only really works with ecommerce business owners may not be the right fit for you. You want to ensure they have proven real-world experience of working with businesses like yours. They’ll be more likely to have useful advice which is relevant to you.

Changing accountants (step-by-step)

Changing accountants isn’t as daunting as you might think. Here are 5 steps you need to follow to ensure a smooth transition.

1. Go over your current contract

There will likely be a notice period within your contract – you should check that first before jumping ship. Once you know how much notice you need to give, you then need to settle any outstanding fees and check termination clauses.

If you leave without settling your debts, your accountant could hold your records until everything is paid.

2. Pick a time to make the move

The best time to switch really depends on your business. Many companies decide to switch after year end, or during a period they know things are quiet. The worst time to choose is an extremely busy period, as this can cause confusion (and your business a lot of stress).

3. Appoint your accountant and arrange a professional clearance

Once you’ve chosen your accountant, they’ll send what’s called a ‘Professional Clearance Letter’ to your previous accountant. This is nothing to worry about – it’s just mandatory practice to confirm there’s no ethical issues stopping them from accepting you as a client.

4. Authorise your new accountant as agent to HMRC

You need to transfer HMRC agent authorisation over to your new accountant so they can act on your behalf. Remember to remove your previous accountant’s clearance when you authorise your new one!

5. Confirm responsibilities through the transition

Both parties should agree on who will handle any ongoing returns, which deadlines are still outstanding, and the exact handover date. Being clear on these points helps avoid duplicate or missed submissions.

How do I give my accountant notice?

Giving your accountant notice is another thing that isn’t as scary as it sounds (we promise). All they need is an email or letter stating your intention to leave – in this you’ll need to request a handover of your records. They should then get back to you with the next steps. If you’re moving to The Accountancy Partnership then we’ll deal with this step for you!

Mistakes to avoid when switching accountants

Although this is a standard process – there’s room for a heap of mistakes to be made. Common issues include:

• Switching at the wrong time: Whilst you can change at any time, changing before a major filing deadline, or mid-VAT quarter can lead to both missed deadlines, and confusion around who’s responsible for filing
• Rushing the process: Rushing the handover could leave you with missing documents, which you don’t want to happen
• Waiting until Year-End when you don’t need to: If you can switch and resolve problems sooner, make the move. There’s no point staying in a contract that isn’t serving your business (this is only advisable if there are other dates in the calendar that can make this possible).
• Losing access to accounting software: Many accountants will provide access to accounting software as part of their service, but some firms will revoke your access when you leave as a client, so make sure you download everything you need first! All our clients can continue using Pandle, even if they decide to leave.
• Failing to update HMRC: Your new accountant needs to be authorised as an agent – which involves removing the old accountant too

Having a checklist and taking your time helps you avoid these problems.

Can I consult with an accountant before switching?

Yes. You don’t have to sign a contract with someone new from the get-go. Many accounting firms, including The Accountancy Partnership offer paid consultations with no obligation to sign up. You can use this as an opportunity to get to know the accountant – they’ll then advise you on the type of accountant you need so you can assess whether they’re the right fit.

 
Learn more about our online accounting services for businesses by talking to one of the team on 020 3355 4047, or get an instant online quote.