Because your accountant plays a key role in the functioning of your business or company, in addition to managing the company accounts, they also ensure that your operations are in compliance with tax legislation and help you to operate tax as efficiently as possible, the relationship between a contractor and accountant is critical to the success and profitability of your limited company. If you are able to find the right accountant for your company, it will be a win-win situation for both you and the accountant. As a small business, you will be able to benefit from the accountant's knowledge and skills, while the accountant will benefit from your working style and will be able to make tailored recommendations to extract the most value from your efforts.
However, there are instances when you as a small business owner may feel the need to switch accountants for a variety of reasons, including:
- You are spending much too much: While you are busy working day and night to grow your business, take a moment to check if your hard-earned money is going to the proper place, i.e. if you are getting a service that is worth the money you spend. If you believe your accountant is costing you a fortune, it is probably time to shop about. Now that you are looking for or considering replacing your accountant, you must look for someone who is a better package than the prior one in terms of expertise and ability.
- Every time you request guidance from your accountant, you will be charged: To manage your business efficiently and properly, you must make sure that your tax returns are filed on time, with the correct amount of tax, and that you claim everything you are entitled to. And if you have to pay the accountant each time you consult him, it's a sign that you should start looking for alternatives.
- You must schedule an appointment with your accountant: When you're self-employed, you have a lot on your plate, and taking time out of your schedule to see your accountant requires not only work, but also time that you could be spending on something more productive. Visiting your accountant on a regular basis is also not a good indicator for your firm.
- Your accountant baffles you with a never-ending stream of jargon: If you have little or little knowledge of accounting, its jargon and terminology will sound no less than French to you, and if your accountant takes advantage of this by throwing intricate jargon at you to confuse you even more, replacing your accountant should be a top priority on your to-do list.
- Your accountant expects you to complete an outdated spreadsheet: The majority of small business owners, freelancers, and contractors find submitting a self-assessment return to be an onerous and scary effort, and they frequently find themselves grappling with the spreadsheet provided by their accountant because it is critical to fill the page accurately. One incorrect move in the spreadsheet can result in the deletion of a crucial formula, which can have a negative impact on the entire spreadsheet. As a result, you'll need an accountant who can assist you in appropriately filling out the self-assessment worksheet, and if your accountant isn't much assistance, you should and must change him as soon as possible.
What is the best way to change your accountant?
Even if changing accountants is not a time-consuming or lengthy operation, it is essential to take the following steps to ensure a smooth transition between the existing and new accountants:
- Inform your present accountant: It's usually best to be on the safe side and notify your accountant of his termination well in advance. In certain ways, doing so will benefit you both. It would enable you to terminate the terms on a positive note and thus make the switching process easier if you provide the accountant adequate time or time as per the agreement to discover an alternate employment for him. Also, you must allow your previous accountant to talk with your new one, as the former is responsible for handing over any documents. It is always preferable to phone your accountant and inform him of his replacement. If you don't want to have this painful chat, you can always let him know by sending him an email, unless a handwritten letter is a required means of contact. You should also include any work-related expectations that the former accountant must meet before being released from his or her duties.
- Disengagement letter: To ensure a smooth transition, your previous accountant must provide a disengagement letter, which is a professional document that contains specifics of all the work he has accomplished, as well as crucial details and information. Before your prior accountant leaves, you must obtain the following facts and details:
- Financial statements in their entirety, including complete profit and loss accounts.
- All accounts must be reconciled in the bank.
- Stock and work-in-progress summaries.
- Copies of the Corporation Tax computations are available upon request.
- Fixed assets, trade debtors, bad debt provisions, prepayments by other debtors, trade creditors, accruals, other creditors, and capital account movements are all examined.
- HMRC released Form CT620 for the most recent accounting period.
- Any information that could have an impact on the company's future liabilities.
- A copy of the most recent CT600, as well as any extra pages, must be submitted.
- The accountant sent a confirmation of disengagement.