09 How to switch accountants and avoid loss of data

You’ve been with your current accountant for years. You’re fairly happy with everything about the firm, but you just aren’t sure you’ve gotten the most from your business relationship. Sometimes you wonder if you should be changing accountants, but you don’t want to go through all of the hassles, either financially or emotionally. Plus you might be apprehensive about the knowledge transmission from your old accountant to the new one and if it is going to be effective so that there aren’t any major hurdles in your business operation down the road with the new accountant.

When switching accountants, it is important to remember that it’s not just about finding an accountant; it’s also about finding the right accountant for your business. Accountants are central to any businesses success because they perform many crucial tasks from checking if the invoicing is correct to staying up to date with the latest sac code list. So here are some of the steps that you should follow to make your transition smooth:

Ask yourself is it necessary

The first step in changing accountants is to understand why you want to switch. This may seem obvious, however, most people do not take the time to reflect on why they want to make such a big change in their business and life. You should ask yourself what your current accountant is not doing for you or whether they are simply overburdened with work. Once you have determined the underlying reason for your wanting to change accountants, you can then focus on how much time you will save by making this change and how much more efficient your finances will be once this has been done.

At Liston Newton Advisory , we work with you to help you understand every element of your financial situation. You’ll get expert guidance and support to create long-term strategies that help you grow your wealth.

Check the timing

Conventional wisdom says that you should never change accountants in the middle of a tax year. If you do, your previous accountant will not be able to help you out with any problems that may arise.

Ensure prior commitments have been met 

To avoid a disruption in your billing and/or filing, make sure you or your previous accountant takes care of any open invoices and changes before you sign on with a new accountant. Your previous accountant should have cleared outstanding bills. If a vendor has been given an estimate of how much they will be paid and a deadline for payment, remind them when payment is due and what date they can expect payment to avoid confusion. Any late payments should be brought up to date as soon as possible. Additionally you should ask for all the minor details like vouchers, cashmemo etc. See more.

Give notice

Always end a relationship on good terms to transition smoothly. While you do not need a reason to switch accountants, it is important to create a letter of notice, regardless of the circumstances.

Telling your previous accountant that you are switching to another firm allows him or her to clear their schedule and start working for new customers.

Disengagement letter

You will want to know about all work your previous accountant has done for you, including when completed and the fees involved. Give this information in a letter known as a disengagement letter.

This is very important because it contains all the information that could be vital to your new accountant so they can understand exactly what they are taking on.