How to Change Accountant

This Article is brought to you in association with Ronan Duffy and Co. Chartered Accountants and Registered Auditors.

We hear of many stories regarding business people that feel stuck with their current provider.

We have put together a few FAQs for your information…. please do not hesitate to contact us if you have any further queries.

Yours faithfully,
Ronan Duffy
Owner of Ronan Duffy and Co., and Director of Royal Canal Financial Control Services.

Frequently Asked Questions on How To Change Accountant

• At What Time of The Year Can I Change Accountant?
• I’m afraid that if I move I will receive a significant bill from my accountant?
• Can my current accountant refuse to let me transfer to another accountant/refuse to release my information?
• Would a new accountant charge extra for set-up costs, or quote a low fee in the first year to get my busines?
• I’ve been with my accountant for ten years and he knows all my history. Will this be a problem?
• Will my new accountant help me negotiate/resolve problems with the outgoing accountant?
• So basically what are the steps involved in changeover?

At What Time of The Year Can I Change Accountant?
You are free to change accountant at any time. The only thing to watch out for is if your accountant is in the middle of an assignment, e.g. annual accounts, they would normally be entitled to bill you for the portion of work completed.

As regards fixed term contracts, it is very unusual for an accountancy firm to have such a contract with small-to-medium sized clients. Fixed term contracts would only arise where the accountant would be at a significant loss for resources already allocated, e.g. provision of accounting staff to your premises on a long-term basis.

It is also good accounting practice that your accountant issues you with a letter of engagement for work performed. This is the contract, and unless in exceptional circumstances there is a stipulation about exiting the contract, you are free to move at any time.

You are also probably free to move if your accountant has a fixed term contract, although a penalty clause may exist (i.e. monetary compensation).

I’m afraid that if I move I will receive a significant bill from my accountant?
Unfortunately sometimes accountancy firms are very slow at issuing invoices for work done, and as the invoicing is usually looked after by the particular department that performed the work, e.g. payroll department, accounts/audit department, you may find that you have paid your accounts bill for the year, only to get a payroll bill in the post six months later relating to the same period as the accounts!

Whether prompted by the client deciding to leave, or the natural progression of time, sooner or later all work provided is billed to the client. So, the issue is not about changing accountant but rather:

• Was the bill included in a quotation for work to be performed? – if not is the amount charged reasonable?
• Was the actual work carried out? Was it included in a previous bill?

Contrary to getting billed for the receipt of goods which is tangible, timely and by list price, it is easier for mistakes to be made both in the interpretation of the services to be performed and the amounts charged for the services. In order to ensure this does not occur, you should:

• Agree a quote for all work to be performed by your accountant.
• Request an engagement letter for all work performed.
• Maintain a record of all amounts billed each year by service (i.e. analyse invoice subtotals) and ensure nothing has been double billed.
• At your accounts finalisation meeting, request a break-down of what is included in the accountancy accrual – this figure would usually include all amounts owing to your accountant but unbilled at the balance sheet date.

If you are unsatisfied with bills received from your accountant, and are unable to reach a satisfactory resolution with him/her, you have a right to complain to their regulatory body. Although regulatory bodies will not judicate on the reasonableness of the fees charged for work performed, if the work is not satisfactorily performed or fees were not communicated in a satisfactory manner then you should have a case for redress.

Can my current accountant refuse to let me transfer to another accountant/refuse to release my information?
Your are FREE TO CHANGE ACCOUNTANT and any attempt by your current accountant to block this is anti-competitive and therefore illegal. Your current accountant is OBLIGED to communicate with the incoming accountant as a matter of professional courtesy (as regulated by the designated institute).

In limited circumstances an accountant may retain your books and records until his/her fees have been paid, however they cannot do this where you have a limited company, as the records are legally to be made available to the Directors and Shareholders at the Registered Office.

Would a new accountant charge extra for set-up costs, or quote a low fee in the first year to get my business?
Much research shows that accountants can make more profit by continuing to satisfy their current clients, rather than losing them and constantly needing to search for new ones.

While a strategy of quoting low fees may get more clients in the door in the first year, pushing up the fees in the second year would not maintain client satisfaction. Follow the advice above as regards getting a quote and request your accountant to issue a revised quote if they wish to increase their fees (which may be justified if the level of work has increased, inflation factors etc.).

While there would be some extra work for your new accountant in the first year, generally this should be factored into the fee quoted. In any case, you should shop around to see what other accountants quote for your work – if you don’t like their price you don’t have to engage their services.

I’ve been with my accountant for ten years and he knows all my history. Will this be a problem?
The obligation of your previous accountant to communicate with your new accountant to inform them of matters that arise in the course of their work continues after the changeover. However, most information of continuing importance relates to the latest set of financial statements and related returns, all of which are requested at the time of changeover.

Will my new accountant help me negotiate/resolve problems with the outgoing accountant?
No. Any such involvement of your new accountant representing on your behalf with your outgoing accountant would likely cause more hindrance and delays in the transfer. It is best to keep the professional correspondence channels between the two accountants as clear as possible.

But your new accountant may be able to offer advice on whether significant error may have occurred with your previous accountant, however professional judgement would require a thorough investigation. Such investigation is carried out by the professional oversight body of the relevant accountancy body. To determine which accountancy body is relevant, check letterheads, invoices and e-mail signatures for designatory letters and institute logos. The most common are as follows:

So basically what are the steps involved in changeover?
1. Communicate to your current accountant that you are changing provider. They may wish you to confirm this in writing giving details of your new provider so as to give them authority to release your personal information and records to the new provider.
2. Your new accountant writes to your current accountant, confirming their appointment and requesting the release of information requested to complete your accounts/payroll/tax affairs etc.
3. Your current accountant forwards all the requested information, usually free of charge, to your new accountant. Where fees are outstanding, you may be able to reach agreement on paying the balance, or may need to agree an instalment agreement. Your outgoing accountant may organise an instalment agreement on your behalf with an external finance provider.

Where there would not be sufficient time to receive all the information by post to complete the assignment, information may be available directly from your own records. For example, with weekly payroll it may be a logistic problem to transfer and complete the next week’s payroll with your new accountant in five working days. To cut down the lag time, you can forward last week’s payslips directly to your new accountant.

REMEMBER Your new accountant does not have to wait for permission to act, but your current accountant must reply if information is requested.