Is It Time to Change Accountants?

Accountants are important to the functioning and profitability of a business, whether that is a startup or a limited company. Not only are they crucial in helping businesses run as efficiently and effectively as possible, but they also help to achieve it from a tax and compliance perspective. So, when it comes to deciding whether to change accountants or not there are a lot of factors that need to be considered.

Choosing who to entrust with your business’s finances and financial interests is a crucial decision. As a business develops and grows, it could mean that you can be faced with the difficult decision of having to change to a new accountant. The best accountants can save you time, money, and help your business thrive. Whereas, the worst could deprive you of all three.

Many accountants will suggest that switching from one to another is a time consuming and expensive process. In some cases, if not handled correctly, it can cause more problems than it solves. Luckily, there are some processes and precautions that you can follow to make the process much simpler. So, if you are looking to change accountants, here’s a four-step guide to changing your accountant.

Reasons to change accountants

There are many reasons why a growing business may feel changing accountants is the right course of action, whether your business has grown and processes have changed, or your accountant’s business has and it no longer suits your needs. The process of changing accountants is actually a relatively simple one, with the right assistance.

Other possible reasons for wanting to change your accountant include:

  • A declining or poor level of service. If you don’t feel like you’re getting the level of service you’re paying for this can be a cause for concern. Most accountants should publish their accounting packages on their websites so research should be hassle-free.
  • They don’t understand the needs of your business. For a company’s accounts to grow, the assigned accountant needs to fully understand what you, as a business, need from them and your plans for future growth.
  • You have received poor advice from your accountant resulting in issues with HMRC. Not having deadlines or paperwork adhered to can land you and your business into serious trouble and it is your accountant’s job to make sure that never happens. Just as you do, other businesses and professionals have different priorities and needs. If your accountant no longer has you in their priorities then it is time to change.

How to change accountants

If you are intending to cut ties with your accountant, the first thing to do is check the details of your agreement. You should not rush into the process of changing accountants, it is important to consider when the best time for the handover to take place is between your current and prospective accountant.

To make the process as simple as possible, try to plan this switch when there is as little activity as possible and ensure that there aren’t any exceptional circumstances that apply to transferring your custom to a new provider.

1- Inform your current accountant

If possible, you should end things with your current accountant on good terms and let them know that you’re moving on, as this will make the whole process much smoother. The process usually begins with a disengagement letter or an accountant termination letter.

A disengagement letter will advise your current accountant that you will be switching to another firm and for them to provide any information requested by the new accountants. This letter will also ask that your existing accountant provide a letter of disengagement in return. You’ll need to grant them permission to speak to your new accountants in order to hand over any paperwork. Alternatively, your new accountants can help you draft a letter of notice on your behalf.

If your existing accountant is Chartered, Certified or accredited under any other professional qualification, they will be bound by their regulatory body to cooperate fully with these requests within a reasonable timeframe, barring exceptional circumstances.

2-  Register with a new accountant

Provided the outgoing accountant has cooperated fully with your requests, it is now time to assign authority to your new accountant to manage your tax affairs, bookkeeping processes and deal with HMRC on your behalf. Your new accountant will send a form for you to complete your registration with them and this should include your personal, as well as company information.

According to UK law, your new accountant will carry out anti-money laundering checks on you, so you will have to provide a scan of your passport or driving license as well as a recent utility bill.

3- Letter requesting Professional Clearance

Your new accountant will write to your previous one requesting what is known as professional clearance. In this letter, they will ask for professional clearance and request any relevant paperwork. They will also ask whether there is any reason they cannot take you on as a client – this is a formality and usually causes no problems.

The letter requesting documents from the previous accountant will include a request for any copies of accounts, tax records, tax returns and any other information they may need. Once this is completed, you’ll need to assign authority to your new accountants for tax affairs, which means they can file returns on your behalf.

Working Together With Our Clients

Our small business accountants in Peterborough are experts in working with clients moving from one accountant to another. We engage with providing the best and highest-quality accountancy services to both SMEs and to self-employed people.

Our extensive accountancy services at Stonehouse cover a wide spectrum of different areas within SMEs from a financial perspective. From changing accountants to set up limited companies, our team will provide clients with advanced assistance which accomplishes a variety of accounting services.

If you are looking for a new accountant or have never worked with an accounting firm before, contact our team today to get started.