If you’re thinking of moving accountant, of course your new accountant will say it’s easy to change. Your old accountant will tell you it’s really hard.
The truth is it’s somewhere in between, it is relatively easy, but there’s a process there with admin, and what you have to do is be careful not to let anything slip through the cracks.
Watch our video for some guidance.
If you think about it, if you’re moving bank accounts, the banks will actually do all of the work for you. They’ll move the direct debits, but you just have to keep an eye on the fact everything has been transferred across; and you’ve made all your payments that month.
It’s similar with accountants. The accountants will do all the hard work. You just have to make sure you know where one ends and the new one starts. Also, if you do move accountants, there’s a little bit of just getting to know each other. They don’t know your business inside out on day one. That can be good because it’s a fresh pair of eyes, but it’ll just take a little while to get up to speed.
What do I need to do?
At its simplest, tell the new one and they do the rest. They’ll liaise with your old accountant to get all the information from them, and they are ethically obliged as members of accounting policies to do this. But if you think about politeness you should really speak to the old accountant, perhaps tell them why you’re moving. It might give them a chance to actually fix it if there’s a problem. Think about it. What would you expect one from one of your customers, if they were leaving you, and treat your accountant in the same way.
What is the process?
The first thing your new accountant will send is what’s called a professional clearance letter to your old accountant. They’re ethically obliged to do this by their institute. But, it gives the old accountant a chance to say if there’s any reason why the new accountant should not accept you as a client. Now this is very rare, it would be something like they know that you’re fraudulent and they’ve kicked you out.
Your new accountant will then need a lot of information. They need your accounts, tax references, passwords, and codes of company’s house. Now they got lots of this from the old accountant, and they ask that in that professional clearance letter. The old accountant, again, will send that across unless there’s a good reason not to do so. In this instance it could be because you owe them money. They’re allowed to keep hold of your records until you’ve paid all of your bills.
Your accountant legally has to money complete laundering checks, which includes making sure that you are who you say you are. They’ll do this by getting a copy of your passport or driving licence and a utility bill, something to prove your address.
Your new accountant will also prepare some engagement letters. This is the contract with you, and it protects both you and your accountant. It makes it really clear what they’re doing for you, what the fees are and who’s responsible for which bits. You agree a start date as well. I’m going to mention the falling through the cracks. This is really important. Your old accountant should at least know when they’re finishing and the new one’s starting; and the obvious example of this is payroll. If you’ve got payroll to run at the end of this month, who’s doing it? Somebody needs to do it, and it needs to be clear.
Usually then you will have a kick-off meeting with the new accountant to get going. Now, most of this stuff could be done electronically, or your new accountant would get it from the old accountant; but the kick-off meetings just gives a chance to just get those bits which actually need your pen on a bit of paper.
We find when we’ve taken a new client, the key really is that kick-off meeting. We should have loads of the stuff from the old accountant by then, but then we can sit down together and make sure it’s all there. Get all that information together and basically talk about how we’ll work together.
Each client has slightly different ways of working and different preferences, so the kick-off meeting lets us understand that. It also lets us understand your goals and where you want your business to get to so we can help you get there. We can put all in writing, so it’s all clear.
So Overall then how easy is it’s change accountant? Well it’s easy-ish, but it does take a bit of work from all parties, and you do have to be aware of that.