Are you worried about changing accountant?

Maybe you are dissatisfied with your existing accountant but worried about changing, 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 accountant.  Some accountants like their clients to think it’s very difficult so that they don’t’ lose clients.  In reality, it’s not difficult at all to change.

However, many clients still have fears about what can go wrong. In this article, I will discuss the issues involved in changing accountant.

Why would you change accountant?

There are a number of reasons why people change accountant.

It may be that they are simply not happy with the service from the existing accountant.  It may be that there was a change in personnel in the office of the existing accountant and they are not happy with the new personnel assigned to them.  The existing accountant may have merged or been acquired by another firm and the client is not happy to stay with the new firm. The client may have been introduced to an accountant who seems a better fit with their particular needs.   There can be many reasons for changing.

Informing existing accountant of the change

Assuming you  got on reasonably ok with the existing accountant, then its probably best for you to be the first to let him/her know that you are changing accountant.

In any event, you must give your accountant specific approval to share information with a new accountant so they need to be told or the new accountant will not get the information that they need.

If the relationship is ok, then you could call them to let them know.  They may well ask why, so you should have your explanations ready and be prepared for them to try to change your mind.

If the relationship is not ok and you prefer not to contact them in person, then we can draft a letter from you to them to let them know of the upcoming change.

Exchanging Handover Information

As a Chartered Accountant, my professional rules requires that I contact the existing accountant, letting them know that I have been asked to act for you and also asking if there is any reason why I should not take on this assignment.

Typical reasons why I would not be able to take on a new client is if there was an unresolved dispute with the existing accountant about the accounting or tax treatment of something.

Once I am satisfied that there is no reason why I cannot take on the new client, I then ask the existing 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.

Anti-Money Laundering

Before taking on new clients, I have to comply with the anti-money laundering regulation by verifying the client’s identity.

Issues around changing accountant

When changing accountant, there are a few issues to watch 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 which will be refunded if you change 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 have 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 really should change.  It will be inconvenient in the short term but, in the longer term, you should be better off.  You need to have confidence with 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.