From having a strained relationship to outdated services, high fees, and lack of experience, there are countless reasons why people decide it’s time to change accountants.
A good accountant should provide support, punctual service and response times and always keep your best interests in mind. An essential part of an accountant’s responsibility is due diligence, ensuring they verify client information and combat potential fraud or illegal activities, adhering to ethical standards and professional obligations.
If your accountant is no longer living up to expectations, it could be time for some fresh new enthusiasm with updated ideas and services.
Unfortunately, changing accountants isn’t the most effortless process, especially if your previous accountant has been with you for a prolonged period. We’ve broken down the process into three simple steps to promote a professional and amicable split.
As long as you do your part correctly when switching accountants, your current accountant can do a seamless handover to your new accountant with no hard feelings involved.
Step 1: Find a New Accountant
Before going ahead and making it known that you will be changing accountants, ensure that everything is in order from your side first.
Take note of:
- Your position regarding an outstanding account and payments. Do you owe your accountant money for work already completed? Or, have you paid in advance for work that hasn’t been done? Ensure all accounts are settled before notifying your existing accountant.
- Your signed service agreement that the accounting firm issued. Ensure you understand any repercussions of terminating the contract or whether there is a required notice period.
The best method of informing your current accountant is a written notification so that all parties have proof. A brief email will suffice and should include your personal and/or company details and the effective date when the service contract will cease.
Additionally, make sure to collect all paper records for a smooth transition.
Step 2: Notify Your Existing Accountant
Before going ahead and making it known that you will be changing accountants, ensure that everything is in order from your side first.
Take note of:
- Your position regarding an outstanding account and payments. Do you owe your accountant money for work already completed? Or, have you paid in advance for work that hasn’t been done?
- Your signed service agreement that the accounting firm issued. Ensure you understand any repercussions of terminating the contract or whether there is a required notice period.
The best method of informing your current accountant is a written notification so that all parties have proof. A brief email will suffice and should include your personal and/or company details and the effective date when the service contract will cease.
Step 3: Engagement Letter, Ethical Clearance Letter and Due Diligence
Once you have let the outgoing firm know that you are preparing to change accountants, you can sign a letter of engagement with the new accountant.
They will send your previous accountant an ethical clearance letter requesting them to release your records and financial statements to your new accountant.
An ethical clearance letter is also a courtesy between accountants where they can disclose issues with a client, such as poor payment history, lousy communication or even honesty concerns regarding accounting disclosures.
While electronic records can be sent almost instantly, paper documents will take longer. If you run into issues trying to retrieve your information from your previous accountant, you can file a complaint with the Tax Practitioner Board or the accountant’s professional bodies.
Documents that should be transferred include:
- access to your accounting software
- receipts, invoices and letters
- financial statements and management reporting
- documents regarding your business, companies and trust, and
- tax returns lodged.
All accounting firms that operate under the compliance structure of an accounting body require due diligence before they sign new clients. Due diligence is the accountant’s responsibility to try to combat fraud and other illegal activities like money laundering.
Your new accountant will ask you to provide documents proving that you are who you claim to be. These include:
- identity document
- proof of address, and
- a copy of your company’s certificate of incorporation.
Please note that the information provided here does not constitute legal advice.
This guide is not an exhaustive source of information. Readers should seek additional professional guidance when necessary.
Looking to Changing Accountant? Consider KNS
We are based in Albury and Blacktown, but work virtually, so we can assist both local and national clients. Our accounting firm is paperless, and signatures are provided digitally, so all liaison is done by phone or email, so clients never even have to step inside our office. Change accountants to KNS, and you’ll gain a clearer understanding of your overall financial life, helping you make more informed decisions about your business and investments.
Change accountants to KNS, and you’ll receive the following services:
- managing your tax obligations
- monthly, quarterly and annual business activity preparation
- preparing financial statements
- tax planning strategies
- preparing your income tax returns
- strategic business development and property investment advice, and
- Capital Gain Tax (CGT) advice.
Our modern accounting system is structured to assist you in reaching legal and tax compliance requirements. Our experienced team of accountants will give you tax advice on how to keep your taxes low and provide professional advice on how to minimise your business costs.
KNS Accountants’ excellent service provides valuable insight into making great financial decisions to set your business up for success.
Key Takeaways
f you feel it’s time to change accountants, there is a simple process to follow to ensure a smooth transition.
- Find a new accountant by doing some market research. Consider whether their fees are competitive, whether they offer the services you require, and if you can see yourself building an ongoing relationship with them. It’s also beneficial to compare multiple accountants to find the best fit for your needs.
- Take a look at your position with your current accountant – do you owe them money, and are there any repercussions for terminating your contract? If you’re ready to proceed, ensure your communication is all in writing.
- Sign the letter of engagement with your new accountant. Have them send an ethical clearance letter to your previous accountant and provide the necessary due diligence documents.
Before you make your final decision, consider changing accountants to KNS, as we provide professional advice that’s personalised to your financial situation. We assist with all compliance work and will help you minimise costs and save money. Remember, it’s crucial to seek your own advice to ensure the guidance you receive is tailored to your specific circumstances.
We can answer all the questions you have if you’d like to change accountants, so contact us today to get started.
Disclaimer
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.
