Business accountant retiring? How to switch firms?

The start of the new financial year has been eventful for the team and me. We’ve picked up a number of new business clients, and when we ask why they’re switching accountants, most say they need to because their accountant is retiring or winding down the business.  It feels like a win/win, great for us to welcome new clients and just as happy for the previous accountant to sail off into the sunset and retire in good spirits. While this is a centralised thought, it does pose a question for the client. “What happens now?”

For many, it can feel overwhelming.  Clients tend to stay with the same accountant for many years, even decades. The client/accountant relationship is a trusted one, and accountants know and need to know a great deal about your financial positioning.  When circumstances require it, changing accountants is generally straightforward; however, reestablishing a relationship with a new accountant can be awkward at first. In this article, I walk you through the process and provide guidance on what to look for if and when the time comes.

In full transparency, the clients we have added this year, due to retirement, have come via a recommendation. However, if your accountant has given you notice of their retirement, don’t leave finding a replacement until the last minute.

Starting early gives you time to meet prospective accountants, understand how they work and decide whether they’re the right fit. It also allows for a more orderly handover, particularly if you have upcoming BAS, tax, payroll or reporting deadlines.

Your existing accountant may recommend another practitioner or firm, as has been the case for us. As we explained to those clients, a recommendation is a useful starting point, but you don’t have to accept it. Use the situation as a good opportunity to assess your accounting needs and make your own decision.

For most businesses, changing accountants is much less complicated than they expect. Once you have appointed a new accountant and advised your existing accountant of the change, your new accountant can usually manage much of the professional handover.

This involves obtaining the relevant accounting and taxation records and ensuring they have the information required to understand your business. Depending on your circumstances, this could include previous financial statements and tax returns, details of your business and entity structures, ATO records, asset and depreciation schedules and access to accounting platforms such as Xero.

Your new accountant will want to understand more than the numbers. A good onboarding process should cover where your business is today, its challenges, your future plans and any significant financial or taxation matters on the horizon. At North Advisory, we emphasise making this onboarding process as easy as possible, so business owners can move forward without unnecessary disruption.

One of the most important questions when choosing a new accountant is: What do you want from the relationship? Naturally, compliance is important. You need an accountant who can prepare accurate financial statements, manage taxation requirements and help ensure your business meets its obligations.

However, for many established and growing businesses, that should be the starting point rather than the entire relationship. Your accountant has access to some of the most valuable information in your business. They should be able to help you interpret that information and use it to make better decisions. That might include identifying opportunities to improve cash flow and profitability, planning for taxes, reviewing business structures, managing growth, and preparing for succession and an eventual business exit.

Qualifications and technical expertise are non-negotiable, but there are several other factors worth considering. Look for an accountant who has experience working with businesses similar to yours and takes the time to understand how your business operates.

Communication is also critical. Can you speak directly with experienced people when you need them? Do they explain financial information in a way that makes sense? Will they contact you proactively when they identify an issue or opportunity, rather than waiting until the end of the financial year?

Technology should also form part of the conversation. Modern accounting platforms and well-integrated systems can improve reporting, reduce administration and give you better visibility over business performance. Lastly, ask yourself whether the accountant is someone you can see yourself working with over the long term. The strongest accountant-client relationships are partnerships built on trust and a shared understanding of where the business is heading.

A retiring accountant may initially feel like an inconvenience, particularly when they have been part of your business for many years. But it can also be a valuable opportunity.

Take the time to consider what worked well in your previous relationship, what may have been missing and what you need as your business evolves. At North Advisory, we work with small and medium-sized businesses to provide accounting, taxation and business advisory support that goes beyond simply reporting on what has already happened. We also offer a highly respected wealth management division.  Most of our clients find this integrated and complementary approach highly valuable, enabling them to manage their business and personal finances under one roof. 

If your accountant is retiring and you’re considering your next move, talk to the North Advisory team. We can explain the switching process, manage the handover and help make the transition as straightforward as possible.