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19th January 2021

Have you been thinking about moving away from your current accountant for a while now, but you’re reluctant to face the daunting task of gathering up all the paperwork and dealing with the process altogether?

Well, it’s not all that difficult, but there are a few essential things you need to consider when you decide to take the plunge.

First and foremost, find an accountant that’s a good fit for your business

We’ve covered this topic in another article, and in it, we explained why you should find an accountant who has experience in your industry. As a limited company contractor, for example, you should search for an accountant that is either a specialist or has years of experience in the field.

You wouldn’t be wrong in asking why, as accounting rules are the same for everyone. That’s correct; a limited company is a limited company; however, nothing can make up for experience and knowledge of rules and regulations specific to your sector. You may not get the same level of advice from an accountant that specialises in media or farming.

Let’s not forget qualifications and industry accreditations like we have with FSCA that provide assurance and show contractors that we represent a level of quality others may not.

Timing

Timing can save you headache and money at the same time. The best time to change from one accountant to another is just after your year-end date.

This is when your existing accountant prepares your accounts for the accounting period, all your bookkeeping is done to the year-end date, and there is a clear picture of your company’s financials.

A timely switch will help the new accountant to pick up your accounts right at the beginning of the accounting year, starting with a clean slate.

Why timing is this important for your sanity?

If you were to switch in the middle of the year, the new accountant would have to pick up work already started by your existing accountant. We know by experience that this is not a simple task, records get misplaced, and communication is often delayed or non-existent between the two parties.

In this case, you are left with trying to piece the books together with the new accountant and search for old records yourself, which is not what you need when trying to run a business. It’s best to leave them to finish the year’s work and move on then.

What about your wallet?

Switching at the right time at the year-end means that your new accountant won’t have to charge you for backdated work for trying to sort out your accounts for the previous year. You pay one accountant to the year-end and the other starting from that date, minimising the costs. Simple.

What are the exceptions?

There are cases when the above ideal scenario just can’t apply. If your accountant has disappeared from the face of the earth, stopped corresponding or being helpful, there is not much you can do but work with the new accountant to put the pieces together from records you retained during the year.

So what is the switching process?

First, make sure you look at the agreement with your current accountant and see if there is a notice period you have to give them before leaving.

Agree with them about the work they will do before you leave, so there are no loose ends and incomplete records or processes. Let them finish your year-end accounts and any outstanding work they might have going on.

The new accountant will send a letter called “professional clearance” to request your records, including reference numbers, registration certificates, and completed accounts.

Once professional clearance has been issued, your new accountant will ask you to assign agent authority to them to deal with HMRC on your behalf.

Once the records are sent over, your new accountant can get to work from the beginning of the new accounting period.

Keeping it simple

In an ideal case, a great accountant will handle the process simply and efficiently with minimum involvement from you, which is brilliant because that’s why you partner up with them in the first place, to make your life easier.

How can MyAccountant help?

We have two decades of experience working with limited company contractors, and an FCSA Accredited personal service that earned us five-star feedback from our clients. So if you are in the market for a contractor specialist accountant, please contact us on 0800 917 9100 or e-mail info@myaccountant.co.uk to see how we can help your business.

For more helpful guides, tips, and articles, visit the blog section of our website and follow us on LinkedInFacebook, or Twitter.

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