How and when should I change my accountant?

Most of us would not think twice about changing our brand of coffee or trying a different brand of car.

But there are some services that people are notoriously reluctant to change.

Most of us have used the same bank for decades even though we know that we will get a better deal if we move to a new bank.

The same phenomenon exists in the accounting profession where clients are notoriously loyal – even if they are dissatisfied with the service they are getting. Even when customer satisfaction is low there can be a reluctance to change service provider.

Four reasons that people don’t change accountants

• Perception of the hassle factor
• Worry about risk involved
• Reluctance to explain their move to their existing accountant
• Scepticism about whether the new accountant will be any better

So, let’s look at the actual process for making the switch and also at the reasons for considering a change of accountants.

How do I change my accountant?

The accounting profession has a clear procedure in place for clients who decide to change accountants. Changing accountants is more common than you might imagine and all reputable accountants will remain completely professional throughout the transition.

Four easy steps to changing your accountant

1.Client gives notice

The client writes to their existing accountant and gives notice. A brief email is adequate and should include details of which companies or services are to be moved and the effective date.

The email should also include the new accountant. This is important because your existing accountant must have something in writing from you before they will release your records to your new accountant.

2.Professional Clearance

Once you have given notice your new accountant will write to your outgoing accountant to request professional clearance. This is part of due diligence procedures. Professional clearance is a courtesy between accountants to highlight any issues they may have had with a client.

This could include poor payment history or concerns over the honesty of a client’s accounting disclosures. It is in place to identify unscrupulous clients rather than simply transferring them to another accountant.

3.Due Diligence

All accountants operating under the compliance structure of an accounting body must conduct due diligence before taking on new clients. This is part of an accountant’s responsibility to help combat fraud and illegal money laundering.

In practice, due diligence is straightforward. You will be asked to provide current proof of your identify and address and will need to provide a copy of your company’s certificate of incorporation. You will also be asked to sign a Letter of Engagement that outlines your responsibilities and those of your accountant.

4. Transfer of Records

Once the above have been completed your outgoing accountants will transfer all records held on file to your new accountants. If records are held electronically this should happen fairly quickly. It may take longer for paper records but most accountants are keen to close off their responsibilities once they have lost a client.

If you are concerned about any fees you may owe then ask your existing accountant for a statement of any balances owed before giving notice. This will give you a clear view on what you may owe for any work they have already completed on your behalf. Most accountants will not charge for the actual transfer of information or the records.

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