The pain-free path to changing accountants
There may be several reasons why you’ve decided it’s time to change accountants. These could range from your accountant taking months to complete your accounts or not being a responsive communicator to the fact that your accountant is “old school” and doesn’t understand cloud accounting.
Whatever your reason, the decision to change accountants is nonetheless a difficult one. After all, you’ve invested time and effort into building a relationship with your existing accountant. Naturally, it’s not uncommon to feel dependent on someone who knows the intimate details of your financial and sometimes personal life and who has served you for some years, albeit not to your expectations. Not to mention, the idea of starting over with a new accountant sounds costly and difficult.
The problem is, delaying your decision out of a misguided sense of loyalty may mean resigning yourself to average results and be worse for you and your business in the long run. However, if you follow the guidelines below, changing accountants need not be a painful or complicated experience.
1. Choose a new accountant
Before making a final decision, it helps to first identify what it is you’re looking for in your new accountant. It also helps to think about what services you expect your new accountant to deliver. Do you just want tax returns and to maintain compliance or do you need a business advisor who offers strategic business development and marketing advice? Bear in mind that not all accountants are the same. Just like other businesses, firms can vary in their experience, specialties, and methods.
Here are some points to consider when looking for a replacement accountant:
- Appropriate qualifications and professional associations
- Understands your business and industry
- Prompt response to your phone calls, preferably within 24 hours
- Reachable by phone or email when you need them
- Available more than once annually
- Offers tax planning
- Holistic approach to your financial affairs
- Business development and support advice
- Goal setting and action planning
- Retirement planning
- Technological capacity
- Fixed fee, pre-emptive, and value-based payment options
The finer details
So, at the end of the day what should your accountant focus on? The bottom line is any accountant you’ve engaged should focus on using his/her expertise to maximise the value you receive from your business. This can be achieved in a number of ways including by:
Setting up protective and tax effective structures to reduce your overall tax bill
Providing you with insight into your finances, so you know how to direct your business efforts
Guiding you through the cloud accounting ecosystem and recommending apps that can help your business run more efficiently
Acting as a sounding board, so you have peace-of-mind you’re in the best possible position
Making you part of his/her business network, giving you the opportunity to grow along with other like-minded entrepreneurs or companies
Once you’ve determined your priority needs, it’s a good idea to ask around for recommendations as well as doing your own research. Then make an appointment to interview your top three choices and take the opportunity to quiz them about how they plan to meet your requirements and support your business.
2. Notify your former accountant
Now that you’ve selected the accountant or firm you feel best meets your needs, we highly recommend that you inform your existing accountant of your decision. While giving your current accountant notice hardly qualifies as a “fun” exercise, it is better the news comes from you as opposed to your soon-to-be new accountant or firm.
A good way to broach the issue might be to say that your business needs have changed and that you feel another accountant is better positioned to look after your business needs at your stage. Try to remember that the decision to change accountants is after all a business-related decision so there’s really no call for feeling uncomfortable or making excuses.
3. Finalising the change
Now that you’ve informed your outgoing accountant of your intent, the process of finalising the change is simple.
As a professional courtesy your new accountant sends the outgoing firm an “ethical clearance letter” asking if there is any reason why they should not accept the engagement and requesting copies of your all relevant financial records including prior tax returns and schedules.
This is accepted best practice for both the Chartered Accountants Australia New Zealand and the Certified Practicing Accountants Australia, and your previous accountant is obliged to respond to the letter and forward the requested documentation to your new accountant.
There shouldn’t charge for handing over the information unless you have an outstanding account in which case the firm might withhold the files until payment is made in full.
Once the change is finalised, you can formally engage your new accountant by way of letter and agreement detailing services to be rendered. And so, your new path to success begins.
Choosing an accountant who understands your business needs and your industry can mean the critical difference between boom and gloom. If growing your business is a priority for you SMART Business Solutions can help you develop a financial plan that maximises your business’s future value.
Want to grow your business & improve cash ﬂow?
You need SMART solutions for YOUR business, not just annual tax compliance! Get the SMART team working with you. Call SMART Business Solutions today on 03 5911 7000 or firstname.lastname@example.org.