Breakups are hard. That goes for professional relationships, as well as romantic ones. When you’ve worked with someone for years or known them as a childhood friend, it’s pretty difficult to look them in the eye and say, “It’s not me, it’s you.”
But even if you find it difficult to tell your CPA you’ve decided to change accountants, it’s sometimes necessary for the success and growth of your company.
I’ve met with many clients throughout the year, who’ve complained that their previous accountant neglected to give them any proactive advice on improving their business.
Unfortunately, many accountants provide poor service by simply reacting to client demands, instead of extrapolating their needs and possible opportunities for the client based on their current or historical data so they can navigate future issues.
Additionally, bad or lazy accountants often give clients wrong or outdated advice. An accountant’s advice is usually not fact-checked by their clients since over 80% of small business owners believe their CPA to be their trusted advisor.
Bad accountants, and their misguidance, are one of the main reasons I’ve written this post. Hopefully, after reading this article, you’re better able to understand:
- Why you need to switch accountants
- What to look for in a good accountant
- How to hire a better accountant
Reasons to Find Another Accountant
So what are some reasons you should switch accountants? Well, there are several reasons that I could think of as to why you’d want to leave your accountant:
They don’t understand your industry
When you’re hiring an accountant or CPA to help you make sense of your financial statements, it’s critical to evaluate their experience with your industry or type of business.
If you’re an e-commerce company, for example, you’d want to hire an accountant who understands the unique challenges you face, like frequent product returns and sales tax-related difficulties.
Similarly, a dentist should look for a firm that offers the best dental accounting services for their needs and goals. Whatever your industry,
They aren’t responsive or available to help you
If your accountant is avoiding phone calls with you or is late in responding to your emails, it may be time to look for someone more attentive to your needs. When an accountant is slow to respond, they’re either overloaded with work or they’re not fully committed to giving you the proper attention.
Timely responses are vital to making customers feel appreciated, which is why you should always ask about an accountant’s response policy before hiring them. Like any company, accounting firms can get too busy to respond to client calls promptly. However, a good accountant will make every effort to respond to your emails or calls in a reasonable timeframe.
They’re retiring from the accounting profession
“More tax and accounting professionals are retiring than being replaced,” wrote Lee Reams II for CPA Practice Advisor earlier this year. Retirement typically starts at 65 to 66 and, as Lee pointed out in the article, the average age for U.S.-based CPAs is 55 years old, according to a 2021 industry report from Roseberg.
They look in hindsight instead of helping you plan ahead
According to a 2014 study done by The Sleeter Group, 72% of business owners left their accountant or CPA because they weren’t offering them sound business strategies. Instead of just helping you complete a tax return, a good accountant should provide solutions to help you overcome tax bill surprises and properly react to tax updates. It’s important to remember that the real value of a CPA lies in extrapolating historical trends to assess future opportunities.
Many times, traditional accountants focus on tax-related issues, believing that forecasting, cash flow consulting, debt reduction, or revenue optimization are the exclusive domain of CFOs. However, modern accountants like those at MBS Accountancy understand that strategy and advice are an integral part of advisory accounting.
They look in hindsight instead of helping you plan ahead
According to a 2014 study done by The Sleeter Group, 72% of business owners left their accountant or CPA because they weren’t offering them sound business strategies. Instead of just helping you complete a tax return, a good accountant should provide solutions to help you overcome tax bill surprises and properly react to tax updates. It’s important to remember that the real value of a CPA lies in extrapolating historical trends to assess future opportunities.
Many times, traditional accountants focus on tax-related issues, believing that forecasting, cash flow consulting, debt reduction, or revenue optimization are the exclusive domain of CFOs. But savvy, progressive accountants like those at MBS Accountancy understand that strategy and advice are an integral part of advisory accounting.
Your company outgrows them
Many businesses prefer to stick with long-time accountants, but changes in your business management or structure can also mean it’s time to change accountants. As your business grows, your accountant must continue to provide updates and advice that help you maintain and improve your company’s financial health. This goes back to picking an accountant with experience in your particular industry.
Their accounting firm changes management or scope of services
Similar to my previous point, changes in your accountant’s firm can make it evident that you need to find a new accountant.
For example, if your accountant decides to build a niche in an industry other than your own, you will need to find a different accountant.
Or, perhaps your main contact leaves the firm, and you don’t work as well with your new point of contact.
Their fees don’t match the value they provide to you
As the saying goes, “Value is more expensive than price.” When it comes to partnering with an accountant, you’ve likely got a specific price range you can afford to pay someone. But, if someone provides you with advice that doubles or triples your return on your investment in them, their value has just surpassed their price.
This is what many great accountants are noticing today. In a Firm of the Future article, I discussed how accountants should focus on providing business advice, not just doing checkbox accounting. In other words, modern accountants need to provide businesses with strategy, not just “check the boxes” on tax paperwork and regulatory compliance. This mindset is missing in many legacy accountants who are still relying on outdated accounting practices and work management systems.
They use inefficient and outdated systems
Sometimes, accountants will charge you a fixed hourly rate for their services. While there is nothing wrong with hourly rates, you should ensure you understand exactly where your money is going. Bad accountants will take this to mean that the longer they take, the more you pay. On the flip side, the faster they work, the less you pay (within an hourly rate pricing model). Fortunately, Sage’s 2020 Practice Of Now report noted that 43% of accountants became more efficient after incorporating critical tech integrations into their firm’s workflows.
They aren’t helping you stay informed and up-to-date
When you hired an accountant or CPA, you did so because you wanted to focus on your core business responsibilities and let them handle your taxes and maybe bookkeeping or accounting tasks. But if your accountant isn’t advising you on how the latest tax changes impact your business or tax plan, your business is slowly falling behind its actual potential for growth and success. Good accountants keep their clients informed. For example, we send out a monthly newsletter to clients with tax tips based on recent changes, accounting and business tips, and important updates about our firm. This is enormously helpful during tax season when we’re deep in tax work and clients see headlines about changes like the recent Beneficial Ownership Reporting. Sharing information regularly keeps everyone on the same page.
The essential traits of a good accountant
By now, you’ve hopefully gained a better idea of whether or not you should change accountants. If you’ve decided that your accountant isn’t a good match for your company’s needs, the next step is to figure out what you should look for in your new accountant.
In addition to expertise and experience, there are 3 traits to look for in your new accountant:
- Clear communication
- Collaborative attitude
- Dedication to learning
Clear Communication
As you consider an accountant, be sure to consider how well they communicate with you. Excellent communication is what separates a good accountant from a bad one. When you meet with your accountant, they should be able to clearly articulate their insights on your financial data and performance – without you needing to become a CPA to understand them.
Collaborative attitude
Because advising forms a large part of modern accounting, it’s vital to hire an accountant who’s able to work well with you or your financial team. If you’re hiring an accounting firm, evaluate whether its CEO tends more toward collaboration or domination with its staff.
Dedication to learning
The best accounting professionals are committed to continually learning about their industry and their clients’ industries. An accountant with this perspective will make sure that they or their company are always advising you based on the most current tax regulations or best practices that are best for your industry.
At MBS Accountancy, we also dedicate ourselves to improving our services for clients. For example, we use LastPass, a leading password manager, to store and manage login credentials, making sure this information is safely stored and protected against hackers and data thieves.
We also use and train businesses on how to use QuickBooks Online for their accounting, since it enables them to securely view financial reports and accounts from anywhere, at any time. By operating more efficiently, we can provide better value for our clients, and focus on helping them develop and achieve long-term financial objectives.
The 3 steps to change accountants and find a better one
Though it sounds like a lengthy process, there are only 3 main steps required to change accountants:
- Find a new accountant
- Inform your existing accountant
- Wait for your new accountant to transfer your information
Finding the right accountant
When you’re searching for a new accountant, there are many places to consider looking. While recommendations from friends and family members are helpful, it’s helpful to remember that their accounting needs may differ from your own.
While I certainly don’t want to discourage you from getting the opinion of a family member or recommendation from a friend, here are some additional places to look as well:
- UpCity: This platform is designed to make it easy for you to find a trusted accounting partner. They place a significant emphasis on authentic reviews, so it’s relatively easy to narrow down your options by the number and quality of reviews. For example, you can search for the best accountants in Fresno.
- Three Best Rated: This directory selects the top three service providers in your area, based on a 50-point inspection. For example, you can see a list of great accountants here.
- Clutch: This platform is another directory that displays a brief snippet about the business and shows their reviews as well. This is an excellent place for B2B companies to find great service companies that make trustworthy, reliable partners. You can search for accountants here.
Selecting your new accountant
As you browse accountants and come across potential new accountants, you want to save those into a list of possibilities that you can reference during your search. This “shortlist” of possible new accountants lets you stay organized and avoid getting lost in the details while you’re looking for a new accountant.
Interviewing your new accountant
When discussing your needs with a new accountant, it’s important that you’re clear about your expectations and needs so you can accurately gauge the accountant’s answers to questions like:
- How much do you charge?
- Can they handle [specific service you need]?
- Do they have experience with your industry?
- Are their systems modern or outdated?
These are just some of the questions you should ask when interviewing a new accounting firm.
Receiving a quote or proposal from your new accountant
Once you’ve found an accounting firm that you’d like to work with, it’s time to nail down solid pricing. By this point, you should have met with the accountant to discuss your needs and they should have a pretty good idea of what you may need in terms of services. But a good accountant will also request financial records from you so they can gain proper context and a full understanding of your financial situation.
For example, after we’ve talked with someone in our Discovery Call, we will request financial documents like tax returns and request an invite to their accounting software. This lets us gain a full picture of the project scope so we can provide a reasonable proposal or quote for our scope of services.
Informing your existing accountant
Once you’ve found a great accountant and have agreed to their quote or proposal, it’s time to break the news to your existing accountant. I’d highly recommend reviewing your engagement letter, if they provided one, to see whether there is a timeframe they request you to give them before discontinuing their services.
In your letter, you want to be clear about the following items:
- Your intent to switch accountants
- The effective date for the switch, if there are upcoming deadlines
- Any specific systems that must be switched to your new accountant
- Any feedback you can give them on why you’re switching
Transferring your information
This step is jointly handled by your current accountant and your new one. Once you’ve informed your existing accountant of the transition, they’ll work with your new accountant to switch your information over.
Then, it’s time to congratulate yourself! You just gave yourself a much-needed upgrade and will hopefully benefit from more strategic advice from your new accountant.