A small business may decide that switching accountants is the best course of action for a variety of reasons, including because your company has developed and changed or whether your accountant’s company has. Contrary to what your present accountant may have you believe, switching accountants is actually a rather simple process.
Prospective clients who want to switch accountants frequently come to us for assistance. Changing from one to another is no longer a time-consuming and expensive process, as many accountants will tell you. The procedure has been simplified and can now be completed very quickly with the right guidance. Continue reading to learn how to switch accountants
Reasons for changing accountants
There are several factors that could be causing you to consider switching accountants. The most frequent justifications we get from potential clients wishing to switch accountants are that their existing one isn’t providing them with proactive advice or that their business has evolved and their present accountant can’t handle the new demands. You could also want to switch your accountant for the following reasons:
- It can be troubling if you don’t believe you’re receiving the calibre of service you’re paying for. Before making any decisions, do some research to see if you can find a better offer and level of service elsewhere.
- Your accountant must completely comprehend your needs as a business or limited company as well as your goals for future expansion. A miscommunication between you and your accountant can cause problems, so trust & understand is essential.
- Your accountants should always be one step ahead of the competition as part of providing a superior service. It is unacceptable to ask you to put everything on hold so that you may quickly complete a tax return. This will keep you from working on your projects, it could trigger a HMRC audit and, more importantly, from expanding your business.
- One of the main justifications for changing accountants is the expansion of your business. When your finances start to become too complicated for your accountants to handle, it’s time to start looking elsewhere.
- It’s possible that your accountant has gotten too big for you in some circumstances. It could be time for you to leave a huge company of accountants if you start to feel like just another number.
What to consider before switching accountants
You should not hire a new accountant right away, and you should think about the optimal moment for your existing and future accountants to give off their duties. Avoid changing accountants in the middle of producing reports or conducting an audit by trying to schedule this change for when there is the least amount of activity possible.
Spend some time making sure you have taken care of all of your financial obligations. The seamless transition from one accountant to the next is frequently delayed and disrupted by loose ends, such as disagreements over unpaid fees.
Simple steps to switching your accountant
Changing accountants letter
Prior to switching to another company, you must inform your present accountant in writing via an accountant termination letter, asking them to give any information that the new accountants may need. If there are any expectations for completed work, such as finishing the financial year-end accounts, you should state these in your letter to change accountants.
Register with new accountant
Your new accountant will send you a client take on forms to fill out, on which you must include both your personal and business details. Your new accountant will conduct anti-money laundering checks on you in accordance with UK legislation, therefore you will need to supply ID such as a copy of your passport and driver’s licence or another form of ID showing your home address.
Sign a new 64-8 form for your new accountant
You will give the new accountant permission to handle your personal and business tax affairs with the HMRC by completing a new 64-8 form. As an alternative, you can finish this phase of the transfer process by using the HMRC’s online approval facility.
Letter of Engagement
Any accounting firm you work with should be a member of an established professional organisation, like the ICAEW. They are required to send a “Letter of Engagement” in this situation. It outlines the expectations and obligations between you and the new accountant, so make sure to read it thoroughly.
Professional Clearance
Your new accountant will send a letter to your old one asking for professional clearance. Your former accountant will understand that you have called the new accountant to represent you and should provide the information requested.
A request for copies of the accounts, tax records, tax returns, and any other information they may require will be included in the letter asking the former accountant for the documents.
A few weeks later, your new accountant should have received all of your accounting data in a secure manner.
How long does it take to switch accountants?
Whilst it can appear there are quite a few steps to changing accountants, once you decide the change and appoint a new firm of accountants step 1-5 above can typically be completed within two working days – at least they are at Raw. This puts the ball in the former accountants court to provide the information requested and we usually find within 2 weeks everything has been received.
Looking for a new chartered accountant for your small business?
If you’re thinking about switching accountants, you can be assured that RAW accounting is the right decision for your small business. You’ll be working with a dedicated accountant who can help and advise on all accountancy, bookkeeping and tax return services.
How to switch accountants FAQs
Can you change accountants at any time?
Technically, you are free to switch accountants whenever you want. However, it makes sense to do so when you have no outstanding invoices to pay, such as towards the conclusion of the fiscal year or during a slow period for your organisation.
Is it a good idea to change accountants?
The entire changeover procedure can be completed with little effort and company inconvenience. One of the reasons you may choose to switch is even if you provided all the necessary information and papers on time, your tax returns were not filed in a timely manner.
Is it easy to switch accountants?
Contrary to what your present accountant may have you believe, switching accountants is actually a rather simple process. Changing accountants can be done with the least amount of hassle, work, and disturbance to your limited company and personal affairs.
