Episode Details

Choosing the right accountant can make a world of difference. A proactive accountant will share tax-saving and wealth-building ideas, be available to answer questions during the year and ensure you never end up in the ATO’s ‘bad-books’.

Common complaints

There are two common complaints about accountants.

Firstly, that they don’t provide proactive advice, including wealth building ideas. They are so involved in their day-to-day work that they don’t stop to ask themselves; “if I was in this client’s position, what would I do?” This is an incredibly valuable question to ask. Most clients want to feel confident that if they are missing any opportunities, that their accountant will point them out.

The second most common complaint is that they are not quick to turn work around. This includes replying to emails/phone calls and completing compliance work such as tax returns. Such delays can cost clients a lot in terms of missed opportunities, delayed decision making and make it difficult to implement financial plans.

What's involved in switching accountants?

Switching accountants is actually a very simple and easy task.

Once you have agreed to appoint a new accountant as your tax agent, they will immediately write to your incumbent accountant for two reasons:

1. To confirm that there are no ethical considerations that may prevent them from accepting you as a new client – this is referred to as an ‘ethical clearance letter’ and is common in the accounting industry; and

2. Request the transfer of your documentation including most recent year’s tax returns, any financial statements, accounting system access, depreciation and cost base schedules, entity documentation such as Corporate Constitutions for companies, Trust Deeds and so on.

As a matter of professional courtesy, virtually all accountants respond to such requests promptly and often without contacting their (past) client. If you owe any outstanding fees, it is commonplace for an accountant to withhold their clearance letter until all fees are paid in full.

Apart from signing an engagement letter with your new accountant, there is nothing you need to do.

Do you have to tell the accountant you're leaving?

The short answer is no. There is no obligation to have any contact with your incumbent accountant.

If you are self-employed or operate a small business, you may have a close relationship with your accountant and are in more regular contact with them. In this situation, it may be courteous that you inform them of your plans to move to a new accountant, before any ethical clearance letters are set out.

But there is certainly no obligation to do so, and very much depends on your relationship with them and the circumstances surrounding your departure.

What will my new accountant do after they are appointed?

I can’t speak for other accountants but typically there are a few steps we take when a new client appoints us, namely:

§ Update the ATO’s records so that it knows that we are your new tax agent and where to send future correspondence. It may be necessary to update other registrations also, such as ASIC if you have a company.

§ Review past tax returns and schedules to identify any mistakes, omissions or planning matters. This is even more important if you have a trading business, as there are more matters to consider.

§ Once we have completed a review, we will be in a position to set out your key milestones, which could include the date when we will undertake tax planning, when we will require your information to start preparing your next return and so on.

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