When, Why, & How To Change Accountants
A good accountant delivers considerable savings regarding the day to day operation of your business, helps you realize tax benefits, and supports you with the potentially stressful matters related to auditing, payroll, and tax among other accountancy services.
The accountancy industry is just the same as other industries in that it is continually evolving and changing. If you never check the market regularly, it will be very hard if not impossible for you to be sure that your accountant is providing you with the best advice and at the leading edge.
When Is It Time to Switch Your Accountant?
Here are three situations where you might have to change your accountant:
Strained Relationship with Your Current Accountant: If you have a strained relationship with your current accountant, it is advisable to try working together to resolve the issue. However, if this does not work, it could be a good time to start looking for a more suitable accountant who will meet your needs.
Business Changes: If the status of your business has changed, it could be time to start looking for a new accountant. For instance, if your business has changed from a sole proprietorship to a limited company, you might have outgrown your accountant and he/she may no longer be relevant to your business structure.
Your Current Accountant is Retiring: If your current accountant is planning to stop operating as an accountant, he/she is traveling the world, moving away, or retiring, you will have to hire a new one to replace the previous one.
Why Should You Change Your Accountant?
It is always advisable to look at your options when it comes to accountants every 2 to 3 years to be sure that your current accountant is competitive with regards to the services provided and the fees charged.
Here are 5 reasons why you may consider changing your accountant:
Fresh Outlook and Enthusiasm: New accountancy firms are being established every month in your area. It can be a great idea to check just to be sure that you are paying the appropriate fees and getting the best service.
Cloud Accountancy: New software packages have been released that dramatically speed up the accountancy process thus allowing for more accurate and faster responses from your accountant. A good accountant will pass on the benefits of such software to clients thus resulting in lower fees.
Services: Accountants generally offer value-added services and pride themselves on being on the frontline when it comes to providing advice that promotes the well-being and future of your business. You can consider hiring a new accountant if this is not the case.
Fees: Are you aware of whether your current accountant is charging a market competitive rate. You should consider comparing multiple accountants to find the answer to the question. If he/she is not charging a market competitive rate, you should start thinking about hiring a new one.
Experience: A different accountant from your current one may have better and up-to-date knowledge for your current needs. Hiring such an accountant can add significant value to the financial health of your business, which you might not have thought of before.
How Do You Change Your Accountant?
Changing your accountant is as simple as changing your doctor and it is the duty of your current accountant to make sure that the transfer of accounts is simple and stress-free.
The accounting profession has provided a clear procedure for clients that choose to change accountants. It is more common than you might think and any reputable accountant will exercise professionalism throughout the transition.
Here are the steps to be followed when changing your accountant:
1. Find a new Accountant
Finding a good accounting firm is quite a serious decision. You should look beyond tax compliance and consider other financial services you may require to achieve your goals. From property investment advice to auditing, a good accounting firm should support you as your lifestyle and business grows and changes.
2. Notifying Your Current Accountant
You will need to write to your current accountant and give notice. A brief email should do and should include details of the services or companies that are to be moved and the effective date. This email should also include details of the new accountant. It is essential to provide the information since your current accountant needs instructions in writing before releasing the records to your new accountant.
3. Professional Clearance
The new accountant will then write to your current accountant seeking professional clearance. Professional clearance is a courtesy between accountants to identify any issues they might have had with a client, which may include poor payment history or concerns about the honesty of a client’s accounting disclosures. It is designed to help identify any dishonest clients as opposed to simply transferring them to other accountants.
4. Due Diligence
Due diligence is a requirement for all accountant operating under the compliance structure of an accounting body before they take on new clients. It is part of the responsibility of the accountant to combat fraud and illegal activities such as money laundering. It is quite a straightforward process where you will be required to provide some documentation to prove that you are who you claim to be.
You will be required to provide proof of address and your identity as well as a copy of your company’s certificate of incorporation. You will also have to sign a Letter of Engagement outlining your responsibilities as well as those of your accountant.
5. Records Transfer
Once the steps above have been completed and you are cleared, the outgoing accountant will transfer all records held on file to the new accountant. If your documents are held electronically, this process should happen relatively quickly. Paper records may take longer.
Want Advice on Changing Your Accountant?
If you are still not sure about switching over to a new accountant and what the process entails, get in touch with us today. We will be more than glad to provide any information that you may need.
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