5 signs you need to switch your accountant

An accountant is one of the most important investments you will make in your business, and a lousy accountant could be one of the worst.

Your business accountant should be able to manage your finances, guide you on problem areas, and sort out the problematic world of tax so you don’t have to.

An accountant failing to handle these fundamental requirements can spell disaster for your business. You could be faced with a tangled mess of accounts or, even worse, a hefty fine from HMRC if your business is in the UK.

Deciding to change accountants is a significant decision for a business and should be carefully evaluated.

Let’s look at some of the common reasons for needing to get another accountant.

Lack of Knowledge of  Your Industry

Suppose your business has grown or undergone changes that require specialized accounting knowledge (such as international transactions, mergers, or complex tax issues), and your current accountant lacks the expertise in those areas. In that case, it might be time to find a specialist.

After an initial conversation, it should be easy to know whether an accountant has any knowledge of your industry.

Make sure to ask plenty of industry-related questions when you first meet them to get a feel for how much they know.

If you have only recently discovered that your accountant lacks knowledge in your industry, it could be time to shop around. Ask others in your niche for recommendations, chat with a few different accountants, and compare their knowledge to find the perfect one.

Changes in Business Structure or Ownership

Suppose your business undergoes significant changes, such as a change in ownership, expansion, or a shift in business structure (e.g., from a sole proprietorship to a corporation).

In that case,   your existing accountant may not be experienced enough to assist you.  Situations like this may require you to contact an accountant who is a CPA with expertise in handling your new circumstances.

Consistent Errors or Issues

Repeated errors, oversights, or issues with the accuracy of financial statements, tax filings, or other critical documents could indicate that it’s time to find a more reliable accounting professional. You really don’t need to accept the mistakes of your professional accountant.

Maybe the errors are due to poor personal fit with your accountant. If you find it challenging to work with your current accountant on a personal level, it might be worth exploring alternatives.

Costs and Value

Are you finding your accountant bills you whenever you make contact?

If your accountant demands a fee for every meeting and phone call, maybe it is time to engage an accountant who offers free advice as part of your monthly service fee. It comes down to value for money and if your business is getting it from your accountant.

Assess whether the fees charged by your current accountant align with the value of the services provided. It may be worth exploring other options if you believe you can receive better value elsewhere.

Poor Communication

If there is a lack of communication or your current accountant is unresponsive to your queries, it could lead to misunderstandings and potentially costly mistakes. A good accountant should be accessible and able to explain financial matters clearly.

You don’t need to put up with an accountant who regularly uses jargon you don’t understand.

One of the reasons business owners hire an accountant is so that they can handle the complicated side of their business’ finances.

With so much legal jargon, you need an accountant to simplify these complicated phrases and words.

The sign of a lousy accountant covers up their lack of knowledge by throwing out as many buzzwords as possible to confuse you and prevent you from asking further questions.

Find an accountant who has the time and patience to sit you down and explain your finances in layman’s terms. Your accountant should be open to educating you as well as guiding you.

Reachable and Proactive

Your accountant is providing a service; therefore, they should be reachable. Your accountant shouldn’t be impossible to get in touch with. As their client, they need to put you and your accounts first. This means being reachable should anything urgent or time-sensitive arise.

When you are looking for an accountant, make this one of your questions to ask and find out how accessible they will be should you start to work together.

Additionally, if your current accountant is more reactive than proactive, switching may be beneficial. A proactive accountant can provide strategic advice, help with tax planning, and identify opportunities for cost savings.

Regulatory Changes

Failure to understand the latest changes and laws within tax can be costly. Changes in tax laws or other regulations that impact your business may require an accountant with updated knowledge.

Tax is something you do not want to get wrong, as it could land you with a very hefty fine. Your accountant should be able to handle anything tax-related with little worry or fuss.

Poor tax management can cost your business a lot of money, so you must check how up-to-date your accountant is with the latest tax laws and practices.

The best way to do this is to research what you can about recent tax laws and changes to those laws. Write down questions about those subjects and test your accountant’s knowledge.

Switching accounts can be tricky, but it will benefit you much more in the long run.

Final Words

Before deciding, contact your mentors and other advisors, like your lawyer and financial advisor, for their thoughts.

The next step is to have a frank discussion with your current accountant about any concerns.  Document everything said, including goals and commitments.

If issues persist and cannot be resolved, conducting due diligence in finding a new accountant is crucial to ensure a smooth transition and continuity in financial management.