10 Signs You Need to Switch Accountants

Changing accountants isn’t easy. But knowing when to switch accountants is fundamental for your business’s success. The right accountant can take your business to the next level; the wrong accountant can hold your business back.

If you suspect it might be time to switch accountants, keep reading. Below, you’ll find telltale signs to watch out for and our best advice on seamlessly transitioning from one accountant to another.

Ready to make the switch? Talk to a Hiline advisor. Hiline gives you best-in-class cloud accounting technology and a seasoned team of accounting professionals to handle accounting, tax filing, and more. We’re experts at helping companies graduate from reactive accounting to financial planning and advisory that drives business growth.

Key Takeaways

• If your existing accountant isn’t proactive, struggles with communication, misses deadlines, is slow to reply, or doesn’t take advantage of technology—it might be time to switch.

• Plan to transition to a new accountant around your business’s financial calendar, for example: after tax season or at the end of the financial year, to keep disruptions to a minimum.

• Switching accountants involves preparation. This means knowing termination terms, gathering relevant documents, and ensuring continuity of service to keep your financial operations running smoothly.

Signs It’s Time to Change Your Accountant

Look out for certain signs in your accounting process—they could be telling you it’s time to change accountants. Spotting these early can keep your business thriving. Here are some key indicators that suggest it’s time to change accountants or switch accountants.

1. Your Accountant Doesn’t Anticipate Your Needs

A top-notch accountant goes beyond just handling taxes and compliance; they act as a proactive and strategic partner in your business. When your accountant understands your long-term goals, they can leverage your business’s financial data to plan for—and create—opportunities that improve margins, increase efficiency, and help with key decisions like when to hire, when to take on debt, and more. If your current accountant is more reactive than proactive, it might be time to find a new accountant who can offer the proactive advice and strategic business advice your company needs. Don’t hesitate to explore new options rather than sticking with your existing accountant or previous accountant.

2. Your Accountant Doesn’t Keep You In the Loop

At minimum, a good accountant keeps you in the know about your business finances. But great accountants go a few steps further—they can break down complex topics, deeply understand your pain points, and tell a compelling story with your data to help make key decisions. 

If your current accounting firm isn’t keeping you in the loop about your finances, it might be time to switch to an accounting firm that values transparency and effective communication.

3. They’re Not Meeting Expectations

Timely financial reporting is essential for managing cash flow and making informed business decisions. If your accountant is consistently falling short of expectations and deliverables, it could seriously hinder your ability to make timely, data-driven decisions.

If poor accountant performance is holding back business growth; it might be time to find a new accountant who prioritizes being punctual and precise.

4. They’re Slow To Respond

In business, quick and effective communication is key. Taking too long to respond to questions or address concerns can stall decision-making and hold back your business’s ability to evolve and thrive. If sluggish responses from your accounting firm are becoming a problem, it might be time to switch to an accountant that values quick and efficient communication.

5. They Don’t Take Advantage of Technology

It goes without saying that in 2024 technology is essential for smooth and efficient business operations. Accounting is no exception. If your current accounting firm isn’t tapping into cloud-based software, they’ll lag behind on efficiency and accessibility.

A modern accounting firm that embraces the latest cloud-based technology makes it easier to make informed business decisions—especially with the support of outsourced accounting services. (More on this later.)

Ultimately, the right combination of accounting and business operations tech can help you:

• Stay connected: Cloud-based accounting software offers seamless, real-time access to your financial data. It lets you manage your finances from anywhere, making it easy to stay on top of things whether they’re traveling, working remotely, or out of the office. 

• Save on costs: Cloud-based accounting software typically operates on a subscription-based model, eliminating any costly upfront investments or maintenance fees.

• Keep business information secure: Unlike traditional accounting systems stored on local servers, cloud-based solutions protect your financial information with advanced encryption and automatic backups and ensure your data is safe from hardware failures, cyber threats, and disasters.

6. They’re Not Thinking About Your Business Goals

Your financial strategies are tightly connected to your business goals. If you don’t see your accountant as a trusted business partner and consultant, that’s a sign they might not be fully committed to your success. 

A great accountant or accounting team will actively engage with your business objectives and help you craft tailored financial strategies to reach your goals. That’s the level of dedication you deserve from your accounting partner.

7. They Don’t Specialize in Your Particular Niche

Does your accountant have pro-level knowledge of what businesses like yours need to thrive? 

A specialized accountant in your niche knows the ins and outs of the tax deadlines, deductions, and compliance requirements your business must follow. They also excel at offering the financial strategy and guidance necessary for your business to make smarter decisions and drive long-term success.

Without a deep understanding of your industry, your accountant might overlook opportunities that could greatly benefit small business owners like you.

8. They Miss Important Deadlines

Missing important deadlines can have serious consequences for your business. Penalties for late tax filings, for example, can take a hefty toll on your finances. If your accountant consistently misses important deadlines, it’s a clear sign that they’re not managing their workload effectively.

Transitioning to an accounting firm prioritizing deadline adherence can ease stress and prevent potential financial penalties.

9. They Can’t Support All of Your Accounting Needs

As your business grows, so do your accounting needs. On top of tax filing, you might need support in other areas, including:

• Managing accounts payable (AP)

• Handling spend management

• Ensuring compliance with HR regulations

• Managing payroll

• Keeping up with bookkeeping

While these tasks may not be the primary focus of a CPA, having an accounting partner who can offer these services can be incredibly helpful.

If your current accountant can’t meet all your accounting needs—it might be time to switch to an accounting firm that can.

10. They Can’t Scale With Your Business

A good accountant or accounting firm has the resources to scale with your business and keep up with your growing accounting needs. If your accountant can’t scale with your business, it could hinder your growth and indicate that it’s time to find a new accountant who can.

With a cloud-based accounting firm, this isn’t an issue. As your business grows, you can adjust your plan to fit your evolving needs.

When is Best Time to Switch Accounting Firms

One thing no one tells you when looking for a new accountant is when you should make the move. The timing of the switch can influence the transition process. Ideally, you should align the switch with your business’s financial calendar to minimize disruption and ensure a smooth transition.

Let’s explore the best times for making this change and the benefits they bring.

Right After Tax Season

After tax season, accounting firms typically experience a lull, making it easier for businesses to switch accountants. Following the self-assessment deadline in January, or the tax filing deadlines in March and April, accounting firms may have more availability to onboard new clients. For businesses, this is a prime opportunity to switch.

This lull period offers businesses the chance to evaluate new accounting options and establish new partnerships.

The End of Your Business’s Financial Year

If you’re thinking of changing accounting firms, syncing the change with your fiscal calendar can streamline your financial operations and help minimize disruption.

The end of the financial year stands out as a strategic moment for changing accountants. It allows for a clear cutoff for financial reporting and auditing, providing a clean break for your business

Tying the switch to fiscal milestones guarantees a smooth transition with minimal impact on financial processes.

How to Seamlessly Switch Accountants

Once you’ve made the decision to switch accountants and pinpointed the perfect timing, the next step is to ensure the transition goes smoothly. By preparing ahead of time, switching accountants becomes a simple process that won’t disrupt your business too much.

Gather Relevant Paperwork

Before switching accountants, it’s essential to lay the groundwork. Here’s what you need to do:

1. Review your current agreement terms with your accountant to understand notice period requirements and how to communicate the termination of services.

2. Outline any work to be completed by your current accountant before the transition and the timelines for this work in a disengagement letter.

3. Gather all relevant business documents, including previous tax returns, financial statements, and access to accounting software.

Get Professional Clearance

Although not officially required in the U.S., asking for a professional clearance letter that confirms the completion of services and any outstanding matters can be helpful. It ensures both you and your outgoing accountant are on the same page.

This professional clearance letter should explain any reasons that might prevent the new firm from accepting the engagement. For example, misconduct or financial irregularities.

Your outgoing accountant is obliged to provide all necessary information and cannot withhold documents, even if there are outstanding fees.

Ensure Continuity of Service

Making sure there’s no disruption in service during the transition process is crucial. You can do this by keeping communication flowing between your outgoing and incoming accountants and giving your new accountant all the financial records they need.

This is a good time to discuss your business’s financial strategies and goals with your new accountant. This helps them tailor their service to match your financial management and planning goals.

How Hiline Can Help With Accounting Services and More

Understanding when and why to change accountants makes a big difference in your business’s success. From spotting the signs to timing the switch—each step needs to be carefully considered.

If you’re looking for a new tech-powered accounting partner, consider Hiline.

We give you a dedicated team of financial experts to take care of your back office tasks—bookkeeping, tax filing, payroll, HR, spend management, CFO advisory, and more. Our team has experience in your niche. And we proactively set up and manage the combination of software, automation, and workflows your team needs to improve organizational efficiency and thrive.

Connect with a Hiline advisor and learn how we can help.

Frequently Asked Questions

What is the process of switching accountants?

Switching accountants involves three main steps: finding a new accountant, informing your existing accountant, and waiting for your new accountant to transfer your information.

How often should you change accountants?

You should only change accountants when your current accountant or CPA isn’t delivering the results your business needs to thrive. Check in on your accountant’s performance every 1-2 years to ensure they’re competitive on fees, services, and results.

How do I know when to change my accountant?

You might need to start looking for a new accountant if your current one frequently refers you to someone more experienced, can’t answer your questions, misses deadlines, or doesn’t provide quality service. It’s important to reassess if you’re getting value for money and if your accountant understands the needs of your business.

What are the benefits of a tech-driven accounting firm like Hiline?

A tech-driven accounting firm like Hiline offers optimized financial management through cutting-edge technology and data analytics, providing personalized support and efficient processes for optimal business performance.