In the life of a company, it can sometimes be necessary to change accountants. As a manager, this can seem complicated, even risky, and it’s often a case of putting off the deadline as long as possible. Yet changing accountants is a simple process, and one that happens far more frequently than you might think.
Here are the steps to follow for a smooth, trouble-free transition.
Why change accountants?
First of all, you need to know why you want to find a new chartered accountant. There are two types of patterns:
- Your accountant’s services are no longer satisfactory (too expensive, unresponsive, communication problems, etc.).
- Your company’s needs have changed (new head office, growth…).
The role of the chartered accountant is to help your business grow: if, for whatever reason, you feel that he or she is no longer capable of carrying out this mission, then it’s time for a change.
Rules for terminating a contract with a chartered accountant
To ensure that your change of accountant goes smoothly, there are a few steps to follow.
Mission statement
This is the contractual document that binds you to your chartered accountant: it is here that the clauses relating to the termination of your relationship appear.
Please read these carefully before starting the cancellation procedure. In the following, we will discuss the usual general clauses, but it is important to check that your contract does not contain any specific clauses.
Severance pay
There is no penalty for terminating a contract at the end of an assignment, as long as the 3-month notice period is respected.
However, if you wish to terminate the contract during the year, you will be required to pay compensation equal to 25% of the fees for the current year.
These points are normally included in the engagement letter.
👆 Good to know: Chartered accountant assignments are generally for one year, renewable, and end when the balance sheet is closed.
Cancellation letter
You must inform your chartered accountant of your decision to terminate your contract, by registered letter with acknowledgement of receipt, 3 months before the end of the assignment.
- You don’t have to justify your choice or explain your decision. However, it is customary to do so informally, either by post or by telephone.
- You must inform your accountant of your decision BEFORE signing a new engagement letter. Your new accountant cannot accept a new client without notifying his colleague.
Of course, the contract between you and your chartered accountant remains valid until it expires. This implies that :
- The chartered accountant continues to perform the tasks defined in the engagement letter.
- You must pay the fees until the end of the contract.
⚠️ Warning: In the event of unpaid invoices, the current accountant has the right to refuse to transfer the documents he has drawn up to his colleague.
Choosing a new chartered accountant and transmitting documents
Knowing the reasons why you decided to change chartered accountants will help you choose the right firm.
- You can choose a traditional chartered accountant with a local presence or an online chartered accountant, whose rates are often lower.
- You can turn to the security offered by large international firms, or prefer the flexibility and responsiveness of smaller accountancy firms.
- You can choose an accounting specialist, or a consulting firm that can advise you on a variety of areas, from digital transformation to wealth management.
In any case, make sure you record all the services you need in the engagement letter before you sign it.
The transition
As long as you meet the deadlines and have no unpaid invoices, the transition from your old to your new accountant is seamless:
- The predecessor will complete his assignment, and all documents from the previous financial year will be up to date.
- The predecessor will immediately transfer the entire file so that the new chartered accountant can start work without delay.
Note: The transmission of documents concerns both paper documents and computerized files.
👆 Good to know: The Ordre des Experts-Comptables imposes a duty of confraternity in its code of ethics. Its purpose is to prevent unfair competition, misappropriation of customers and fraudulent practices.
When should you change accountants?
It is advisable to change accountants at the end of the year, after the balance sheet has been closed. This avoids the need to pay early termination fees and facilitates a smooth transition.
⚠️ Please note: if you wish to change your accountant at the end of the year, you must begin the process no later than September.
However, it is perfectly possible to change accountants during the year. This may also be recommended in certain special cases (e.g. moving house).
The steps to follow are similar, and the transmission of documents between your old and new chartered accountants will be carried out in the same way, so that you can benefit from a seamless, high-quality service.
You still have questions
❓Do you have any questions? Are you looking for added value? Looking for more advice? Contact us to discuss your situation
👆 You can also take a look at our different accountancy offers! We adapt to the size and complexity of your business.
