It goes without saying that your accountant should have a keen understanding of who pays you, who you pay and how to maximize your returns on investments. Because your accountant is so intimately involved in assisting with your financial decision-making needs, the relationship should be one that is built on a foundation of trust and transparency. However, sometimes when that level of comfort no longer exists, it may be time to move on.
Reasons to Switch to a New Accounting Firm
It’s important to understand the main reasons why some businesses decide to make the change. Below, we’ve isolated several key reasons small business owners start seeking accounting help elsewhere.
Insufficient Understanding of Your Industry or Business Basics
If an accountant is not industry-specific, they may lack the foundational knowledge to fully understand their client needs. When clients feel like their accountant just isn’t “getting it” in regards to their specific business needs they may consider switching to a firm that specializes in their industry.
Some business owners become understandably frustrated if they can’t reach their accountant on the phone or even by email. Having access to your accountant is critical to help you make the most informed business decisions, in a timely manner.
Seeking Proactive Advice
Bookkeeping services that only send out reminders to go over finances at tax time may mean well, but unfortunately they aren’t offering proactive services to their clients. Indeed, one of the main purposes for hiring an accountant is to receive guidance on how to move forward with investments, maximize ROI and boost income, throughout the year. They should be able to help steer your business in the right direction and should not just be in the business of putting out fires after the fact. An accountant who only helps you to make reactive moves, isn’t providing the right service for your needs.
Lack of Approachability
Sometimes despite their best efforts, accountants can be intimidating in their communication. Some may consistently speak in jargon, talk down to business owners, or make them feel like they don’t understand their finances. All of these attributes can cause them to lose clients.
Changes in the Organizational Structure of the Firm
If a trusted accountant at a firm retires, passes away or is otherwise moved out of the organization and replaced, some business owners may use this as an opportunity for a fresh start at a new firm.
Sometimes you might find yourself paying too much for accounting services that may not even be meeting your needs. This may be the case whether you have hired an in-house accountant or if you are working with a firm that charges high fees and has locked you into a cumbersome contract.
Many small business owners value technology to make processes more efficient in their own businesses and look for accountants who do the same. If your accounting firm is behind the times in terms of technology adoption, you might jump ship to seek out a firm that can more efficiently service your business needs with new technology.
Pros and Cons of Switching Accounting Firms
If you’ve had any of the above concerns about your current accounting firm, it may be time to think about finding a new firm to meet your small business accounting needs. Below are some pros and cons of switching accounting firms.
You’ve Been With Your Accountant for Several Years
Con: Your Current Accountant Knows Your Business
If you’ve been with your accountant for at least 5 years, then they will have specific insights on your business, capital expenditures, tax needs, ROI, etc. All of that knowledge will have to be transferred and relearned by someone new. For this reason, it can sometimes be tough to make a switch.
Pro: New Accountants Can Help Your Business Grow
If you’ve had the same accountant for 5 years or longer, they may be out of touch with the needs of your business. Sometimes just having a fresh set of eyes can prove to be particularly beneficial to achieving your growth objectives. In addition, if you are exploring new lines of business, you may need to hire a new accountant that possesses industry-specific knowledge that will help with this transition.
You’ve Been Overpaying for Accounting Services
Con: You Could Lose Out on Valuable Services
Every business owner wants to save money. However, cost should be a secondary consideration to the quality of services your accountant will provide. Be sure to evaluate the list of services they provide and also online reviews from past and current clients. You don’t want to make a switch only to find that the cost savings comes from cutting corners.
Pro: You Could Save Money
By doing the proper due diligence, you can find a firm that costs less while still offering the exact functions you require. In particular, outsourced accounting services such as those provided by Ignite Spot will help you reduce costs without sacrificing service quality. Ignite Spot is typically 60% more affordable than hiring in-house staff which can cost tens of thousands of dollars.
Your Current Firm Handles Business and Personal Taxes
Pro: You Could Find a Firm Dedicated to Business Accounting
If you are currently seeing an accounting firm that splits its time between personal and business taxes, you might be more comfortable with one that is dedicated to business customers only.
Tax time is stressful enough without wondering if you are going to get attention from a professional who understands the needs of your business. In fact, some firms may regularly file for extensions for their business clients when they have to handle huge volumes of 1040s.
You’re Currently with a Small Firm Who Struggles with Busy Seasons, Availability and Timeliness
Con: Large Firms Often Offer Less Personalized Service
With a huge accounting firm, you may feel as though you are just a “number”. You may not even know the name of your accountant.
For the small business owner who prefers to speak on the phone with their accountant, it may be better to stay with a smaller, regional firm or consider an outsourced accounting firm like Ignite Spot.
Pro: Outsourced Accounting Services Have More Hands on Deck
Switching to a firm with more bandwidth can ensure that your small business accounting needs are met in a more timely fashion no matter what time of year it is. Larger firms work with clients year-round whose fiscal years end at different times, not just December 31st. They have the staff on hand to ensure clients seamlessly transfer from one fiscal year to the next. They also have the bandwidth to make sure that bottlenecking does not occur around tax time, fiscal year end or other peak season.
Pro: Larger Firms are More Likely to Invest in State-of-the-Art Technology
Depending on your needs, it may be good to find an accounting firm that specializes in using new technology for bookkeeping services. Bigger firms tend to have more funds to invest in technology and an infrastructure in place to support it. In addition, most outsourced accounting firms will invest in state-of-the-art technology that allows you to access your financial information whenever you need it and from any location.
You’re Thinking of Switching Because of Poor Customer Service
Con: Organizational Structures are Subject to Change
While it’s important that you find a new accountant to get the quality service you deserve, also bear in mind that the accountant you are comfortable with could leave the organization or be moved to a different part of the management structure where they no longer service your accounting needs. In these situations, you will have to decide if you can handle being moved to another accountant within the organization or if it is advantageous to switch firms again.
Pro: A New Firm May Have Knowledgeable, Relatable Experts So You Don’t Have to Settle
You don’t necessarily need to be best friends with your accountant, but you do need to be comfortable with them. Conducting an interview and reviewing client testimonials will help to give you a sense of the type of personalities you may be working with at a new firm.
Recapping: When to Make the Switch
If you’re experiencing any of the following it may be time to make a switch to a new accounting firm:
- Your accountant isn’t returning your calls
- They don’t understand your business
- They only offer advice reactively or during peak season
- They don’t provide the quality of service you are looking for
- You feel as though you are overpaying for accounting services
- They don’t value technology the same way you do
- Your trusted accountant has left the firm or moved in the ranks
- You’ve outgrown the services that are provided
- You are seeking a firm that specializes in business taxes
How to Replace Your CPA Firm
But where do you start? It’s understandable that small business owners who have only ever worked with one or two firms may not know the best way to go about transferring their business to a new firm. You can overcome that hurdle with these steps.
- Notify your current accountant that you’ve decided to move on. This offers them a chance to work with you to fix issues and save your business in advance of a transfer. If your concerns are fixable, it may save you time, stress and effort. But if you are firm in your decision to leave, it’s still a good idea to notify them first.
- Let your current accounting firm know where to send your files. Regulatory bodies mandate that accountants turn their files over to the new firm of your choosing.
- Confirm file transfer with your new small business accounting firm. File a complaint with your former firm’s regulatory board in the event an amicable file transfer is denied.
Is it Time for You to Make a Change?
If you’ve been thinking about leaving your current accounting firm, with a better understanding of the pros and cons you can feel more confident in making your decision. Transferring your business to a new accounting firm can involve some drawbacks, but in many cases, the pros outweigh the cons.
Ultimately, partnering with a dedicated small business accounting firm that specializes in your industry, offers the type of support you need when you need it and helps you maximize your investments, will give you peace of mind when it comes to ensuring business continuity.
At Ignite Spot, our goal is providing outsourced services to meet your needs. This includes virtual bookkeeping services, outsourcing financial reporting, tax preparation strategy and profit coaching.
Our CFO services are built on actionable steps that you can implement right away. We’ve coached hundreds of businesses and have identified the specific areas that will matter most to your profits. When you master these concepts with your Ignite Spot profitability coach, you’ll see a noticeable difference to your bottom line. Our CFO services include:
- Cash flow forecasting
- Budget-to-actual reporting
- Break-even analysis
- Labor cost management
- Variable vs. fixed expense reporting
- Debt planning and reduction
Feel free to contact our team today to see how we can meet your small business accounting needs.