As a company director, your accountant is likely to be your most important and trusted source of professional expertise. But what happens if things go wrong?
If your accountant is missing deadlines, making errors, or is difficult to deal with, it may be time to switch. While the process is straightforward, it’s important to recognise the warning signs early and handle the transition carefully to avoid disruption.
At IT Contracting, we have worked with dozens of accountants over the years and switched providers several times.
We’ve also received emails and spoken with other contractors who have shared their experiences with accountants (good and bad).
This guide will look at some classic warning signs that your accountant is not doing their job properly. And then work out how to resolve the problem.
Signs your accountant may be underperforming
Missing statutory deadlines
One of an accountant’s most fundamental jobs is to submit tax information to HMRC on time and accurately.
Failure to meet a deadline – whether for Corporation Tax, annual accounts, VAT, Self Assessment, or another – can result in penalties and HMRC’s unwanted attention.
The longer the delay, the higher the penalties.
Compiling your accounts incorrectly
If your accountant fails to prepare or review your accounts properly, you may, once again, be liable for penalties.
HMRC may apply a penalty if a tax return, or other document is incorrect, and tax has been:
- unpaid
- understated
- over-claimed
- under-assessed
As a company director, you remain responsible for your company’s filings even if you use an accountant. However, whether HMRC charges a penalty can depend on the circumstances, including whether reasonable care was taken.
Bad communication
A frequent bugbear of our readers, an incommunicative accountant can cause genuine anxiety for clients.
Poor communication can have many causes, such as staff absence, misunderstandings, or problems with technology (imagined or otherwise).
However, once emails and calls go unanswered or aren’t adequately addressed over time, it’s clear there is a problem.
Even if you’re a ‘difficult client’ in your accountant’s eyes (yes, we work with a lot of accountants too), a good accountant should deal with you professionally, and not answer you with silence.
Resourcing issues
Another oft-mentioned issue is that of resourcing.
Many limited company accountants promise clients a ‘dedicated personal accountant’ – i.e. a single point of contact should you need help.
From our experience, this is essential. There’s nothing worse than having to re-explain things to multiple people.
Bad resourcing can, of course, lead to poor communication and possible errors.
What is a personal accountant?
If you use a specialist accountancy firm, you may deal with account managers, bookkeepers or other staff for routine work, with qualified or more experienced accountants handling technical matters where necessary.
This isn’t necessarily an issue for many contractors, as many monthly and annual tasks are automated, routine, and fairly uncomplicated.
However, when you need specific professional accounting advice, you should be able to access this without delay.
From our experience, delays are often caused by a lack of input from experienced or qualified staff, for which ‘personal accountants’ may get the blame.
Are you being overcharged?
If your company is on a monthly fee package, have your fees increased to an unjustifiable level?
Has your original accountant been acquired by another player in the market, with service declining as fees rise?
Perhaps ‘add ons’ such as Self Assessment filing have increased in price to an unreasonable level?
Clearly, there’s nothing worse than feeling taken advantage of, so unfair pricing is another classic sign that you may need to look around for a replacement accountant.
Our Partner Accountants
| Accountant | Cost | Key Features |
|---|---|---|
| Aardvark Accounting | £89 | Free company formation + FreeAgent. |
| BI Accountancy | £119 | 5 star Google reviews |
| Integro Accounting | £125 | EasySwitch between limited and umbrella. |
| Clever Accounts | £104.50 | Free company formation + IR35 FLEX solution – for any contract. |
| SG Accounting | £119 | Free company formation + free tax return. |
| You can compare the monthly fees of over 30 accountants here. | ||
Should you switch accountants?
Company directors don’t tend to change accountants unless they have tried to resolve matters or tolerated poor service for a significant time.
So, unless something dramatic has happened that compels you to give notice immediately, chances are you know instinctively that it’s time to call it a day.
It may be possible to negotiate lower fees or successfully resolve specific issues. You may also want to understand how fees work in practice – see our guide to catch-up fees.
But things like consistent poor communication tend to be a systemic problem from our experience.
It’s up to you, of course, if and when you decide to change accountants.
But how does the changeover process work in practice?
How to change accountants
The process of switching accountants is governed by several factors: professional procedure, the competence of those involved, and some client involvement.
Choose a new accountant
If you’ve had a bad experience, you are likely to be extra cautious when it comes to choosing a new accountant. Take your time to research the marketplace – we’ve covered this in detail here.
Give notice to your current accountant
Assuming your payments are up to date, there shouldn’t be a reason this isn’t possible. Check your letter of engagement to find out if you have agreed to a notice period. Once you’re sure you want to leave, give written notice to your current supplier.
Timing is important
Accountants often say that the best time to change accountants is following your company’s year-end. You will typically have paid for your year-end accounts to have been completed by your old accountant.
Alternatively, a new accountant may offer to take over your accounts and sometimes complete your current year’s accounts for free (or a set fee). It depends on how desperate you are to move firms. Read our guide to timing your move.
Professional Clearance
Your new accountant will normally contact your previous accountant as part of the professional clearance process. The outgoing accountant should then provide the records and information the new accountant is entitled to receive. Internal working papers do not automatically form part of the handover.
If you use accounting software, such as FreeAgent, you may also need to confirm that your new accountant can access your account. This is usually a fairly simple process.
Switching HMRC access
Your new accountant will need authority to deal with HMRC on your behalf. There are several ways this can be arranged, depending on the tax and HMRC service involved.
You may be asked to approve an online authorisation request or use another HMRC authorisation process. In some cases, an authorisation code may be sent to you by post.
Read more about authorising your accountant to deal with HMRC.
Be proactive during the transfer
Once your new accountant has been instructed, they should be able to deal with the transfer fairly smoothly. The more proactive you are, the smoother the transfer is likely to be.
Switching accountants is usually straightforward when handled properly, and a good new firm should guide you through the process with minimal disruption.
Recommended Contractor Accountants
- Aardvark Accounting – All-inclusive – £89 per month, no catch-up fees
- Bright Ideas Accounting - £119/month, 5-star Google rating
- SG Accounting – First 3 months at £59.50 pm, no catch-up fees
- Clever Accounts – IR35 FLEX – take on any contract you are offered
- Integro Accounting – 6 months fixed fee accountancy - half price!