Accountants play a very important role in the functioning and profitability of a business. In addition to helping you manage your business accounts, they help ensure the tax efficiency of your business while making sure to comply with all tax legislation. However, even with the important role your accountant plays, certain changes or growth to your business may require you to make the difficult decision of switching accountants.
Switching business accountants can be an expensive and time-consuming transition, especially if you don’t know what you are doing. This is why in this article, we have created a step by step guide to help make the process easier.
Try To Remedy The Situation
Changing your business accountant is never easy, especially if you have built a good working relationship over the years, so if you have reasons to believe that you and your current accountant can potentially address the issues, now is the best time to do so. However, if you’ve addressed those issues before and there is still no improvement, then it is best to start looking for a new accountant.
Find A New Accountant
This can be a tricky process, so proper research is key. Your new accountant must be a professional capable of supplying all the specialist services your business requires. These include services like; bookkeeping, tax-planning, auditing, property investment planning, and financial advice. Ensure to also consider the experience, reputation, and cost of hiring your new accountant. Just like many other industries today, the finance and accountancy industry is constantly evolving, so look for a professional who is well versed in the newest technology and industry trends. If you’re looking for accountants Epsom, a suitable option would be Sloane and Winckless.
Notify Your Current Accountant
Once you’ve found a new accountant, the next step is to write and give notice to your current accountant. If possible, try to end things on good terms, as this will make the transition a lot smoother. Either you or your new accountant can draft the letter of notice, which should include details of all the services that are to be moved, the effective date, and the information of your new accountant. This way, your current accountant can provide a disengagement letter (details of the work they have completed so far, key dates and information).
Professional Clearance Letter
This is a letter written by your new accountant to the previous accountant. It informs your former accountant that you are looking to hire the services of a new accountant and also asks if there are any reasons (professional) as to why the new accountant should not take you on as a client. The letter will also request documents like; copies of accounts, tax returns, tax records, and all other vital information from your previous accountant.
This professional clearance letter is usually for formality and should cause no problems. However, you may be charged a small fee by your previous accountant for the service.
Read Through The Letter Of Engagement
The new accountancy firm that you hire must be a member of a recognised professional body. This means that they will be obliged to provide you with a letter of engagement. Ensure that you carefully read through this letter as it sets out the requirements and expectations between you and your new accountant.
Due Diligence And Records Transfer
All accountants operating under the compliance structure of any accounting body are required to carry out due diligence before taking on clients. This is to combat illegal and fraudulent issues like money laundering. The process is quite straightforward, and you will need to provide documentation to prove that your business is what you claim it is. Some of the documents required include proof of identity and address, copies of your company’s certificate of incorporation, and a signed letter of engagement.
Once due diligence is complete, and your company cleared, your outgoing accountant will transfer all your business records held on file to the new accountant. If the records are held electronically, the process should be relatively easy and quick. Paper records may, however, take longer.
Changing your business accountant is a big transition. It is safe to say that you’re embarking on a fresh start for your business’s financial future, so you need to do things right. The above guide is sure to help you make the transition easy with little to no disruptions to your day-to-day business activities.