Breaking up is never easy. Even when it’s with your accountant.
Maybe communication has gone quiet. Maybe you only hear from them when a deadline is looming. Or perhaps your creative business has simply grown and you need more support than you did a few years ago.
Whatever the reason, switching accountants doesn’t need to be awkward, complicated or involve a dramatic “we need to talk” conversation.
In fact, once you’ve found the right new accountant, much of the switching process can be handled for you.
Key takeaways
- You can change accountants if your current firm is no longer the right fit for your business.
- Your new accountant can usually manage most of the handover with your previous accountant.
- Your accounting records and relevant information will need to be transferred.
- You’ll need to authorise your new accountant to deal with HMRC on your behalf.
- Choosing an accountant who understands your industry can give you much more than someone who simply files your accounts.
So, if you’re wondering how to change your accountant, here’s how it works.
Why might you consider switching accountants?
There doesn’t necessarily have to be anything dramatically wrong with your current accountant.
Sometimes businesses simply outgrow the relationship.
Perhaps you started with an accountant who was perfect when you were a freelancer, but you now have a limited company, a growing team, several revenue streams and slightly more ambitious plans.
Or maybe you feel like you’re constantly chasing your accountant for answers.
Some common reasons for switching include:
- Slow communication
- A lack of proactive advice
- Not understanding your industry
- Unexpected or unclear fees
- Limited support with business planning
- Outdated accounting processes
- Feeling like another number on a spreadsheet
Your accountant should understand where your business is going, not just where it has been.
For a creative business in particular, that can mean understanding project-based income, freelancers, irregular cash flow, international clients and all the other wonderfully unpredictable things that come with running a creative company.
Can you change accountants?
Yes.
You’re free to choose the accountant you want to work with and change accountants if you feel another firm would be a better fit. Professional guidance for accountants specifically recognises a client’s right to change their accountant.
That means you don’t need to stay in an accounting relationship simply because you’ve been there for years.
You should, however, check your current agreement for any notice period, outstanding fees or other commitments before making the move.
And if you have an important tax or filing deadline just around the corner, speak to your new accountant about the best time to make the change.
How to change your accountant in 5 simple steps
1. Find your new accountant
Before telling your current accountant that you’re leaving, make sure you know where you’re going.
Speak to prospective accountants and ask about more than tax returns and year-end accounts.
You might want to know:
- How quickly can you contact them when you have a question?
- Do they understand your industry?
- Will they provide proactive advice throughout the year?
- What accounting software do they use?
- Can they help with forecasting and business growth?
- Who will actually be looking after your business?
At Raedan, for example, we work with more than 150 creative businesses and take a much more collaborative approach to accounting. We want our clients to understand their numbers rather than treating accounting like some mysterious dark art.
You can find out more about how we work.
2. Let your current accountant know
Once you’ve decided to move, you’ll need to tell your existing accountant that you’re changing firms.
You don’t need to produce a 12-page resignation letter.
A simple message explaining that you’ve decided to move your accounting to another firm and giving permission for them to communicate with your new accountant will usually get things moving.
And remember: this happens all the time.
It doesn’t need to be personal.
3. Give your new accountant permission to take over
Once everything has been agreed with your new accountant, they can begin the formal handover.
Your new accountant will normally contact your previous accountant with what is commonly referred to as a professional enquiry. Your previous accountant will need your consent before confidential information can be shared.
If you’re switching to Raedan, this is the bit where you can put your feet up.
Once your proposal is signed, we’ll liaise with your previous accountant and arrange the information we need to get started.
4. Your accounting records are transferred
Your previous accountant can then provide the relevant information and records needed by your new accountant.
This might include things such as previous accounts, tax returns, bookkeeping information, payroll records and other information relating to your business.
Accountants are expected to deal promptly with reasonable requests for the transfer of records, although circumstances such as unresolved fees can sometimes affect which records can be released.
It’s therefore worth sorting out any genuine outstanding invoices with your old accountant rather than leaving loose ends behind.
5. Update your HMRC authorisation
Finally, your new accountant needs permission to speak to HMRC and manage the relevant taxes on your behalf.
HMRC has specific agent authorisation processes for services including Corporation Tax, PAYE, Self Assessment, VAT and Making Tax Digital services. When you appoint a new tax agent, new authorisation can replace the previous authority for the relevant service.
Your new accountant should guide you through whatever authorisations are required.
Then congratulations: you have officially switched accountants.
No dramatic breakup scene required.
What should a creative business look for in a new accountant?
Changing accountants is also a good opportunity to think about what you actually want from the relationship.
Your accountant shouldn’t simply appear once a year, tell you how much tax you owe and disappear again.
A great accountant should help you understand what your numbers are telling you.
That might mean helping you understand whether you can afford your next hire, how much cash you need in the bank, whether a new project is actually profitable or what your business could look like in another three years.
That’s especially important for creative businesses, where revenue and workload rarely arrive in perfectly predictable monthly chunks.
Working with specialist accountants for creatives means your accountant already understands many of those challenges.
Is switching accountants difficult?
Usually, nowhere near as difficult as people imagine.
A good incoming accountant should do most of the heavy lifting, including speaking to your previous accountant and helping arrange the transfer of information.
At Raedan, we’ve deliberately made the process as straightforward as possible because we know that the thought of changing accountants can be enough to make people put it off.
But staying with the wrong accountant simply because switching sounds awkward isn’t a particularly good reason to stay.
Ready for a change?
If you’ve been Googling how to change your accountant, chances are something about your current accounting relationship already isn’t working.
Maybe you want quicker answers. Maybe you need more strategic support. Or maybe you just want an accountant who understands the slightly unusual world of creative businesses.
Whatever has brought you here, switching accountants doesn’t need to be scary.
We’ll handle the handover with your previous accountant, get everything set up and start getting to know you, your business and where you want to take it.
Sounds better already, doesn’t it?
Get in touch with us and let’s have a chat.
