Switching accountants can seem overwhelming, but for small businesses, it’s often necessary to unlock their full business potential. Whether you’re unhappy with your current accountant or seeking improved accounting services, knowing how to switch accountants can be a game-changer. This process can lead to better tax planning, optimized personal tax strategies, and more effective financial management.
If your limited company has outgrown your accountant’s capabilities or needs a fresh perspective for the upcoming financial year, it’s time to change accountants. Finding a good accountant who understands your specific needs—whether it’s through online accounting services or specialised advice—can make a significant impact.
In this guide, we’ll explain exactly how to switch accountants smoothly, from notifying your current accountant to setting up new services. With the right steps, you can ensure that your transition enhances your financial strategy and supports your long-term growth.
Why you might consider changing accountants
While this can seem like a significant change, there are several reasons why making a switch might be the right move for you. Here are a few questions to consider.
Have your needs changed?
As your business evolves, your accounting needs will change. What you initially needed from your accountant may no longer align with your business needs. If you’re experiencing rapid growth, expanding internationally, or entering new markets, you need an accountant that can support those ambitions.
Are you getting value for money?
Accountancy fees vary, but you should always feel confident you’re getting good value for your money. Research industry benchmarks, compare pricing structures, and evaluate the scope of services provided by other accounting firms to ensure you’re getting a good deal.
According to a study, 72% of business owners left their accountant because they weren’t offering them sound business strategies. This emphasizes how vital it is to not only get what you pay for but to feel confident you have an accountant who’s the right fit.
Is communication a constant struggle?
Clear and regular communication is vital for a healthy business-accountant relationship. If you’re constantly chasing your accountant for updates or struggling to get your calls returned, it can lead to frustration. These are all signs you could benefit from a more proactive accountant.
Are there red flags with compliance and expertise?
Staying compliant with tax laws is crucial for any business. Although your accountant should always aim to file your tax return promptly and efficiently, sometimes errors can occur.
While one late filing or minor error isn’t always a reason to panic, a pattern of mistakes could be cause for concern. If you find yourself facing penalties or constantly having to correct inaccuracies. When considering how to switch accountants, it’s essential to think about whether a change could be beneficial.
Cost-efficient, reliable accountants for your business
Sleek UK offers stress-free, affordable accounting and tax services. With our support, you can easily stay compliant and boost tax returns. Here’s what we provide:
- Get assistance from seasoned accountants: A dedicated accountant will reconcile your accounts, prepare financial statements, balance sheets, offer advice, and do much more.
- Skip the hassle with paperless bookkeeping: Say goodbye to paperwork! Send us your receipts and documents electronically, all stored digitally and accessible anytime.
- Stay compliant and on-time, every time: Keep track of your filing deadlines year-round to ensure compliance and stay on top of tax return submissions.
- No hidden fees: Enjoy transparent, all-inclusive pricing that covers all your business needs, avoiding surprises and penalties.
Whether you’re a sole trader, limited company, contractor, or a start-up, Sleek offers the best tailored accounting services to fit your business needs.
The steps for switching accountants
Knowing how to switch accountants doesn’t have to be a complex process. It involves a series of straightforward steps to ensure a seamless transition. By carefully managing each stage, you can avoid potential hiccups along the way.
1. Find your new accountant
Choosing the right accountant for your business is the first and most crucial step in this process. Although it can take time and effort, researching various accounting firms to find one that fits your specific business requirements will be beneficial long-term.
Start by seeking recommendations from business associates, searching online directories, or checking out professional bodies, such as the ICAEW for accredited accountants. You should also read reviews and testimonials to ensure they’re reputable and trustworthy.
Consider their areas of expertise, whether they’ve worked with similar businesses, and look for those with specializations if your business requires specific services, such as corporation tax or e-commerce accounting. It’s also vital to think about whether the size and structure of the firm align with your preferences.
For example, some businesses prefer the personalised services of a smaller firm, while others are okay with a more corporate environment. When considering a move to a new accountant, check online review platforms such as TrustPilot.
With client testimonials, star ratings, and comments about their experiences, it can be an invaluable tool. Take, for example, this five-star TrustPilot review about a UK accountant: “It is very daunting finding a new accountant. I visited several accountants but TaxAssist was the most helpful and friendly, always on time with appointments…and they are very quick to answer my questions.” – Joy Chittenden
2. Contact your new accountant
Once you’ve selected your new accounting firm, reach out and schedule a consultation. This initial meeting will give you the opportunity to discuss your business in more detail and determine if you’re a good fit for each other. Many firms offer a free initial consultation.
It’s usually the new accountant’s responsibility to handle the transfer process from your existing firm, making it one less thing for you to worry about. This typically involves sending a professional clearance letter to your previous accountant, which includes seeking their consent to act for you and request for transferring all your accounting records.
Your new accountant will likely also provide you with the necessary documents. For instance, you’ll need to sign a new form 64-8, which authorizes them to deal with HMRC on your behalf.
3. Informing your previous accountant
Before commencing work with your new accountant, you’re contractually obligated to inform your current accountant of your intent to switch. This should be done in writing with a professional tone, clearly stating your decision.
Remember that your existing accountant is obligated to cooperate with the transfer of information to your new one, even if you have outstanding invoices. Be prepared for potential handover fees for their time and administration, although not all accounting firms charge for this.
4. Finalising with your new accountant
With your previous accountant notified, your new one will manage the process from here, obtaining your records, familiarizing themselves with your financial history, and ensuring a smooth handover.
It’s a good idea to have a final meeting or call to tie up loose ends, clarify any outstanding queries, and settle any remaining fees with your former accountant. This is also the time to request confirmation that they have ceased acting on your behalf.
Conclusion
Knowing how to switch accountants when necessary can make a real difference to the long-term success of your business. However scary this process may initially feel, approaching the situation with professionalism and an open mind is essential for all parties involved.
For small businesses, switching to an accountant with expertise in tools like Xero accounting can streamline your bookkeeping and financial management. Change accountants when your current provider no longer fits your needs, you take control of your business’s financial future. Choose someone who understands your industry and the unique needs of limited companies, ensuring you have the right support as your business grows.
The right accountant can offer insights and strategies that will keep your company compliant, efficient, and set up for long-term success. We’ve now covered ‘how to switch accountants’ in detail.
FAQs about how to switch accountants
Is it difficult to change your accountant?
Contrary to what many people believe, changing accountants isn’t as complicated as you might think. With the steps outlined above and your new accountant guiding you, the transition can be effortless.
How do i transfer from one accountant to another?
Transferring is more straightforward than it seems. Your new accountant will contact your previous accountant requesting relevant paperwork and professional clearance. This usually involves sending a disengagement letter followed by the transfer of documents, such as tax returns, financial statements, and any other relevant information.
Is it okay to switch accountants?
Yes, it’s completely fine. It’s a business decision, and there’s no obligation to stay with an accountant you’re not satisfied with. However, it is essential to approach it professionally and ethically to ensure a smooth and seamless process for everyone involved.
How do i change the accountant?
The simplest way is to notify your old accountant and inform them about the change. They will handle most of the handover process, including informing HMRC that they’re no longer representing you. Once you’ve appointed a new accountant, you can authorise them to deal with HMRC online in a couple of minutes here.
