How do you know when it’s time to change accountants?

How do you know when it’s time to change accountants?

Deciding to change accountants can feel like a big step, but as your business grows it may become a very necessary one. So how do you know when it’s time to make the switch? Here are five questions to ask yourself before making this important decision.

1. How many times has my accountant referred me to another specialist in the past year?

A tell-tale sign that you might need to start looking for a new accountant is if your current one frequently refers you to someone more experienced. If they can’t answer your questions on their own, or through their team, then they may not be best placed to provide you with advice moving forward.

 

This doesn’t mean they’re not great at their job – quite the opposite. It probably means that they offer highly specialised service, but their area of speciality no longer aligns with your business.

 

For example, perhaps they are solely focused on compliance (which was excellent when you were just starting out), but now you need a range of services? If this sounds like the case, then a fresh start will likely make sense for both parties.

 

2. In what ways has my business changed since I started working with my accountant? 

When you first launched your business, chances are you were a one-man-band (or operating with a very small team) and largely focused on breaking even and keeping the tax man happy.

 

Now that you have evolved beyond the start-up stage, your financial goals are probably more complex. You still want to keep the tax man happy (this goes without saying!), but you now have layers of financial responsibilities which all need to be managed by an expert.

 

Analyse the areas of your business that have evolved significantly and assess whether your accountant is still the most qualified person for the job.

 

Read more: Five steps to creating a financial strategy for your business

 

3. Is it time for me to create my own finance department?

Once your business reaches a certain size you may decide to bring your accounting needs inhouse by creating a finance department and/or hiring a Chief Financial Officer (CFO). This becomes necessary when you need a full-time specialist to focus on money management.

 

If you don’t feel quite ready to make this leap, consider inviting an accounting specialist to sit on your governance board. As the business evolves, they may take on a more active role, or provide you with the advice you need to internalise all accounting processes.

 

4. What does my business partner/mentor/colleague think?

If you have worked with your accountant for a long time, you may no longer be able to assess their performance from an unbiased, critical viewpoint. Perhaps you have become close friends? Or maybe you have never reviewed their services before and don’t know where to start? What’s more, you probably don’t even know what other types of accountants are out there and how they measure up to their competitors.

 

Your business associates can provide a wealth of information in these circumstances. Do some research among your peers to find out what their accountants offer and try to figure out whether you might benefit from making a change. Don’t be afraid to ask for advice.

5. Do I feel in control of my finances?

When it comes to tax compliance, cash flow, GST and other money management matters, are you actively involved or do you tend to take a backseat? While it’s essential to place trust in your accountant, as your business grows it’s equally essential to ensure you have hands-on involvement. How often do you meet with your accountant? Do they send you regular updates?

 

Are the lines of the communication open, or do you feel like it’s always a challenge to lock in a face-to-face meeting? If your accountant feels inaccessible, or there is a communication breakdown, this could be a good indication that it’s time to change things up.

 

When working with a new accountant, you’ll have the opportunity to establish clear communication KPIs from the beginning, so you feel in the driver’s seat from day one.