Recently we had clients approach our firm wanting to know how they can change accountants and if it will cause problems. I therefore decided to write this article to explain the ABC of changing your accountant.
WHEN TO CHANGE ACCOUNTANTS
Have you found yourself asking the following questions;
- Am I getting value for money – assuming you know the value you want?
- Does my accountant fully understand my business needs and what the plans are to grow the business in the future.
- Is the service satisfactory and are returns filed in good order and on time?
- Could I get better service elsewhere?
- Has my business outgrown my accountant?
- Is my business treated like just another number to a large firm of accountants?
Changing your accounting partner is not something that many companies do lightly, but there are some reasons situations that make it inevitable;
- When your accountant fails to submit your VAT Return on time, provided you shared all information required. Failure to submit your VAT Return on time incurs AED 1000 penalty. Firms that fail to notify their clients of their VAT deadlines or fail to promptly follow-up are basically not using any form of practice manager or CRM to manage their client base. This will definitely lead to bigger problems in the near future.
- When you don’t get management reports regularly or when requested within a reasonable time-frame. Try asking your accountant to provide you the last VAT Report breakdown, or your latest Profit and Loss or Balance Sheet. If the the firm is unable to provide this information, then the same situation can cost AED 10,000 fine when requested by the FTA. We will typically provide ANY of these reports within 24hrs to ANY of our clients.
- When you must wait more than 30-60 days to have the last months accounts closed. If they are unable to close your accounts within 7-10 days of receiving all the data, then you know that they are either under staffed, or disorganized and this is a problem waiting to go from bad to worse.
- When the accountant is unable to answer technical VAT questions immediately then you must consider that they either lack the knowledge or experience to deal with VAT and this can prove to be costly later down the line. Imagine if they do not understand VAT or lack the experience then the amount of errors that they are accumulating will be very costly to you when the FTA do their investigation.
HOW TO CHANGE ACCOUNTANTS
The process of joining Profits Tax Consultants involves:
- Select a changeover date that is going to cause the least disruption in your business. Typically the end of a VAT Return period is ideal.
- Ensure all financial responsibilities to your accountant are discharged i.e. all outstanding bills paid.
- Inform your current accountant that you are planning to change and they have permission to converse with your new accountant for the purpose of handover of paperwork and information. Of course, if you want to avoid the possible awkward call or email to say you are leaving them, we can draft a letter for you to sign and send it on your behalf.
- Your new accountant will write to the outgoing accountant asking for professional clearance along with any relevant paperwork. In this letter, we will ask your old accountant if there is any reason why we cannot take you on as a client. This is a professional formality and does not normally present any problems. The information collected will include previous year’s accounts & tax returns, reconciliations and any bookkeeping work they may have done on your behalf. Your old accountant should provide the information within a “reasonable time” for which there may or may not be a fee. It should not be more than an hour charged.
- Before joining us we will usually send our new client application form to capture your personal and company information. A ‘Scope of Works’ sets out the expectations and requirements between the client and the accountant which needs to be agreed and signed. Usually there are standard terms of business and a separate fee letter. Make sure this is signed and returned to us otherwise it is assumed to be agreed after 31 days from the date issue.
- After a few weeks, assuming there are no hold ups, all your accounting information should have been transferred and you will be safely on board with us.
Profits Tax Consultants are happy to meet with people for a no-obligation discussion on what we can offer you & your business, and what you would require from us. Price alone is never the determining factor. Call us on +971585442030 or email on firstname.lastname@example.org