How to change accountants -- the exact steps to follow

Deciding to change accountants can be a big decision for a business. Your accountant likely handles important financial tasks for your company like bookkeeping, payroll, tax preparation and planning. However, there are times when it makes sense to switch to a new accounting firm or accountant. Here is a step-by-step guide on how to properly change accountants:

Identify Why You Want to Make a Change #

Before beginning the process of changing accountants, take time to identify exactly why you want to make this change. Is your current accountant retiring or relocating? Have there been communication issues or difficulties getting responses in a timely manner? Has your business outgrown the capabilities of your current accountant? Pinpointing the reasons will help as you search for a new accountant that can better meet your needs.

Research Prospective Accounting Firms and Accountants #

Once you know why you want to make a change, start researching options for a new accountant. If your reason is needing more capabilities, search for larger firms that offer a wider breadth of accounting services. If you want more personalized attention, seek out independent practitioners. Talk to business colleagues and advisors to get recommendations of accountants they use and trust. Look at online reviews and compare the services, experience, and costs of prospective firms and accountants. Narrow down your options to a few top candidates.

Interview Potential New Accountants #

Schedule interviews with the top accountants you identified in your research process. Come prepared with a list of questions that cover the most important attributes you are looking for in a new accounting provider. Inquire about their experience in your industry and with businesses of your size. Discuss what services they can provide and their processes for tasks like payroll, audit support, tax planning, etc. Consider asking for client references you can contact as part of your due diligence. Take note of whether they ask insightful questions about your business goals and needs.

Check Credentials and References #

Take time to verify the credentials and references of the accountant or firm you are leaning towards hiring. Make sure they are a licensed CPA in your state with no disciplinary actions on their record. Follow up with the references provided and ask about their overall satisfaction working with the accountant. Look for past clients comparable to your business. If possible, review sample work provided by the accountant like audits and tax returns. Thoroughly checking credentials and references helps ensure you select a qualified and reputable accountant.

Review Engagement and Costs #

Before making a final decision, get full details on the accountant’s fees and services. Ask for an engagement letter that outlines the scope of work so you understand what is covered. Clarify when and how you will be billed throughout the year. Inquire about how costs may grow if your business revenue increases. Make sure you feel the accountant’s pricing is competitive for the level of service being provided.

Notify Your Previous Accountant #

Once you have selected a new accountant, formally notify your existing accountant in writing that you will be ending your professional relationship. Provide the effective date so they can prepare final invoices and transfer any essential information and files. Clearly communicate what records and documentation you would like turned over to your new accountant. Follow up to ensure this hand-off is completed on time.

Onboard Your New Accountant #

Schedule an onboarding meeting with your new accountant to get the relationship started smoothly. Provide necessary financial records, reports, tax returns, and contact info for banks, vendors, employees and other key entities. Establish the frequency for meetings and timeline for completing upcoming tax filings and audits. Discuss the preferred methods to communicate issues and exchange information. Clarify upfront any concerns and outline your priorities so you are aligned on expectations.

Changing accountants can feel overwhelming but following this structured process helps ensure a smooth transition to a new accounting provider. With an organized approach, thoughtful research, and clear communication, you can effectively move from your old accountant to a new accountant that better fits your business needs and positions you for ongoing financial success. Let this guide make the process straightforward so you can focus energy on your business growth!