Are you looking to change accountants? Is your accountant not responding or taking far too long to get back to you?

We often have clients sign up for our services due to a negative experience with their previous accountant or accounting firm.

For example, we picked up a new client in the Formwork industry. When asking him about why he wanted to change accountants, he told us that his previous accountant was a great accountant but never picked up his phone calls or returned emails or calls.

This is a lesson to anyone in the services industry that doing good work alone is not enough. Having someone personable who will treat your business like their own is extremely important.

Unfortunately, changing accountants is a lot like breaking up with a girlfriend or boyfriend. It can be stressful, costly, and it fills your mind with anxiety! A lot of business owners find themselves plagued with questions like:

• What’s going to happen to the business?
• How much tax am I going to pay?
• Will the tax office come knocking?
• How am I going to lodge my BAS and tax returns?
• How will I have the time to look after all the compliance work?

Notifying your existing accountant in writing is crucial to ensure a smooth transition and proper documentation.

This guide will show you the steps needed to avoid a messy split with an accounting firm or accountant. Accounting firms are vital in ensuring compliance with ethical standards and proper documentation during the transition process.

Understanding the Need for Change

Changing accountants can be a daunting task, but it’s important to recognise when it’s necessary. If you’re experiencing inadequate service, poor communication, or a lack of expertise from your current accountant, it may be time to consider changing.

 Additionally, switching to a new accountant can be beneficial if your business has outgrown your current accountant or you’re seeking a fresh perspective. Understanding your needs and goals is crucial in finding the right accountant for your business.

How to Change Accountants Tip #1: Collect your Information and Files

Changing accountants requires you to do it in a smart and well-planned way.

The first step is to make sure that you are collecting as much information as you can:

• Tax returns lodged
• Access to your accounting software
• Financial statements
• Important documents concerning your business, companies and trust
• Copies of receipts, invoices and letters

These can be attained through emails and hard copies you have filed away. If you feel vital documents are missing, contact your previous accountant to request any missing documentation. The outgoing accountant plays a crucial role in ensuring a smooth document transition, whether electronic or paper records.

How to Change Accountants Tip #2: Review Your Current Agreement T&Cs

Track and review where you are regarding your payments towards your current accountant.

Have you paid ahead for work that has not been completed? Or do you owe for work that has already been done? Assessing your payment history, including any poor one, is crucial when reviewing your client’s background and during the ethical clearance process between accountants.

Take the time to review your signed service agreement issued by the accounting firm so that you are fully aware of the repercussions if you decide to terminate the contract. Is there a notice period that needs to be served?

What method of communication is required to notify your current accountant of your decision to cease utilising their services?

It’s important to note that you should not tell your current accountant that you are looking to change accountants yet.

You might also be interested in our article: 3 Steps to Reducing Your Accountant Fees

Change Accountants Tip #3: Find and Speak to a New Accountant First

Shop around and speak to multiple accountants to see what may be best suited to you.

Ensure that you are addressing any shortcomings that you want to avoid. Be sure to discuss the following:

• Specialisation – Do they offer the services you require? Do they have experience and similar clients in your field?
• Communication and point of contact – Who will you be working with, and how will they contact you?
• Fees – What are the costs?
• Qualification and Registration – Make sure their tax agent license and membership with accounting and tax associations are valid.
• Tax Return – Ensure they can handle your tax return efficiently and accurately.

It is essential to find an accountant that you can trust and believe you can work with in the long run to avoid having to change accountants again so soon afterwards.

How to Change Accountants Tip #4: Attempt to Remedy the Situation

If you believe the issues can be addressed with your current accountant, this is the best time to do it rather than change accountants.

If, after discussing this with them you feel that there is no improvement to the situation, then its best to start.

How to Change Accountants Tip #5: Sign Engagement Letter and Send Ethical Clearance Letter to Outgoing Accountant

By now, you should have signed the engagement letter with your new accountant.

Have your new accountant send through an ethical clearance letter to request information from your previous accountant. You can also send through the information you have collected previously to speed up the transition process.

If you encounter complications with requesting your information, speaking to your new accountant to mediate the issue would be best.

Should this persist, your last step may involve filing a complaint with the Tax Practitioner Board or an appropriate association that your previous accountant is affiliated with, such as the Institute of Chartered Accountants or CPA.

Benefits of Changing Accountants

Changing accountants can have numerous benefits for your business. A new accountant can bring a fresh perspective and provide expert advice on tax planning, business structure, and financial statements. 

They can also help you identify areas for improvement and provide guidance on how to minimise your tax obligations. Additionally, a good accountant can offer property investment advice, business advice, and help you achieve your financial goals. 

By switching to a new accountant, you can better understand your financial life and make informed decisions about your business.

Avoiding ATO Attention

Changing accountants is common, and it’s unlikely to attract negative attention from the Australian Taxation Office (ATO). However, it’s essential to ensure that your new accountant is a registered tax agent and that you’re meeting your tax obligations. A good accountant will guide you through the process and ensure you comply with all tax regulations. By choosing a reputable and experienced accountant, you can avoid any potential issues with the ATO.

Key Takeaways

• What’s important is that you are minimising any risks associated with an accountant who may react spitefully.
• You’re protecting yourself and your business by planning and keeping all necessary relevant documentation if you need to change accountants.
• While it’s doubtful to occur, it’s essential to ensure that there are no regrettable outcomes resulting from complacency or negligence. If you are still uncertain, Box Advisory Services can guide you through this process if you want to change accountants.

Book a free consultation with us to find out how we can help you.

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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. 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.