Are you worried about changing accountants?
Are you dissatisfied with your existing accountant but worried about changing accountants? This could be because you are fearful that it would be a lot more hassle than it’s worth?
From time to time, I get asked by prospective clients how difficult is it to change accountants. Some accountants make their clients think it’s very difficult to find new accountants. In reality, it’s not that difficult to change at all.
Moreso, many clients have fears things can go wrong when they change them. In this article, I will discuss the issues involved in changing accountants.
Why changing accountants might be necessary?
There are a number of reasons why you might want to change accountants.
It may be that you are simply not happy with the service from the existing accountant. Or maybe you are unhappy with the newly assigned personnel. The current accountant may have merged or been acquired by another firm and you are not comfortable with it. You might have been introduced to an accountant who seems a better fit for your particular needs. Honestly, there can be many reasons for changing.
Informing the existing accountants of the changing plans
It’s a rule of thumb that you be the first to let your current accountant know that you are changing accountants. Be well prepared to explain why you are changing and be prepared for them to try to change your mind.
It is very important to request your current accountant to be willing to share information with a new accountant.
In case your relationship is not ok then you can draft a letter letting them know of the upcoming change.
How I go about the handing-over process when changing accountants
As a Chartered Accountant, my professional rules require that I contact the existing accountant. This is to let them know that I have been asked to act for you and ask if there is any reason why I should not take on this assignment.
One typical reason why I would not be able to take on a new client is if there was an unresolved dispute with the existing accountant. This could be about accounting or tax treatment.
If there are no pending issues stopping from taking on a new client, I will ask their previous accountant for copies of what we call the handover information. This handover information will include the last set of accounts, tax and CRO returns, and the essential background information that I will need going forward.
In my experience, I have never had a problem getting this information within a reasonable time period.
Before taking on new clients, I have to comply with the anti-money laundering regulation by verifying the client’s identity. To know more about anti-money laundering read here.
Issues around changing accountant
When changing accountants, there are a few issues to watch out for.
Timing of changing accountant
If the existing accountant is working on accounts or a specific project it’s probably best to let them finish that. Otherwise, you may end up paying twice for the same work. However, if you are not happy with the work they are doing, you will not want to stay with them.
If you are on a monthly payment scheme with your existing accountant, just check what you have already paid for and if there any element of a prepayment that will be refunded if you change the accountant. You may need to check the original agreement that you signed.
If there are any outstanding bills you may have to pay those in full before the existing accountant will release your information.
Most common myths of changing accountant
One myth that I have come across is that if you do change accountant, you are more likely to be audited by the Revenue. I don’t believe that this is true. Revenue has software which they use to select candidates for audit and this software is understood to use an analytical approach to highlight issues such as suspicious margins or unusual expenditures rather than the identity of the new accountant. If the new accountant has a poor track record with Revenue, that may be a factor but for most accountants, Revenue will not be interested in accountant changes.
If you are not happy with your existing accountant, then you should now be confident to make the change. It is true it might be inconvenient in the short term but, in the longer term, you should be better off. You need to have confidence in whoever is supporting you on such a critical part of your business.
If you have any questions about this article or indeed about any accounting related items, please contact me on 086 2323525 or jim (at) accountsplus (dot) .ie.