How do I change my accounting firm? A practical guide for entrepreneurs

Have you been thinking about changing your accountancy firm but not sure if it is a good idea? Before you make a decision, it is worth finding out how this might affect the operation of your business. Therefore, to avoid unnecessary problems in your tax and accounting settlements and billings, prepare accordingly. Read further if you want to discover how to change the accounting firm step by step and what formalities do you have to take care of.

When is it worth considering a change of the accountancy firm?

The most common reason behind an accountancy firm change is the dissatisfaction with the current accounting services. Entrepreneurs who feel neglected or who want to grow, while the accounting support does not meet their expectations, usually decide around to change their accounting firm the end of the accounting period. This is not a rule, of course. 

One of the frequent reasons behind such a decision are rife mistakes in the accounts, incoherent communication or silence, as well as inadequate knowledge of the current tax and Social Insurance Agency regulations.

Main reasons for changing the accountant

• Errors in bookkeeping which result in serious consequences
• Tax delays causing many unnecessary, unpleasant situations
• Unsatisfactory level of customer service translating into missed opportunities and difficult cooperation
• Lack of awareness of changes to tax legislation posing a threat to business growth
• Documentation and communication problems that hinder daily work

Each of the listed problems promotes a desire for change. Of course, this often involves a great deal of stress, especially if we are afraid that recurring inaccuracies or impaired communication may also occur with the new firm. This is why it is so important to carry out the vetting of the new firm in a reliable and informed manner, and to establish new terms of cooperation in advance.

When can the accountancy firm be changed?

There is no specific day of the year which could be considered the best. However, it is usually the end of the accounting period (e.g. monthly or yearly period) when the transition is easiest. It is then more structured and absolutely simpler for each of the involved parties.

How to change the accountancy firm step by step?

1. Check the contract with your current accountancy firm

Before you start looking for a new firm, review your current accounting services agreement. The key items in it are:

• Notice period
• Termination conditions
• Obligations related to the transfer of documentation

For example, if the notice period is one month, you must terminate your agreement adequately well in advance. Adherence to the terms of the agreement is essential.

2. Termination of the accounting services agreement:

Before you change the accountancy firms, it is always worth to negotiate. Of course, if your decision is an informed one, from the formal point of view you usually only need to give written notice of termination to your current accountancy firm. You can deliver the notice by acknowledgement of receipt or electronically, e.g. to the email address of the firm.

Examples of elements of the notice of termination:

• Details of the accountancy firm
• Your data as an entrepreneur
• Information on agreement termination
• Date for termination of cooperation

It should be noted, however, that cooperation termination is not the only solution. Attempts at repairing the relationship, voicing the dissatisfaction and the willingness to change which may be the result of a prior talk, may sometimes yield the expected results. However, if, despite your efforts and willingness to change, your needs continue to be neglected and your irritation levels rise, it may be time for something new.

3 Choosing a new accountancy firm

You are facing a difficult decision. Change requires adequate preparation, so check the offer and reviews of the new firm carefully before you sign the agreement.

What to look for?

• Experience and qualifications of accountants – it is very important that the firm employs professionals who are constantly improving their qualifications
• Feedback from other entrepreneurs – reviews indicate satisfaction and point to specific benefits of cooperation
• Scope of the accounting services offered – this can help avoid unnecessary misunderstandings
• Service price – it is useful to know how much the service will ultimately cost
• Form of business contact (face-to-face or online) – if you have questions or concerns, make sure to get answers to them before you proceed
• Record-keeping, Social Security and tax services – find out what your options are and make the best use of them for you.

4. Transfer of documentation to the new accountancy firm

The next step is very important and you bear the sole responsibility for it. Remember to hand over complete documentation as soon as possible after terminating your agreement with your previous accountancy firm.

Documents which should be provided:

• Full accounting books
• Revenue and expense invoices
• Social Security and tax declarations and returns
• Employment contracts and other contracts concluded with employees
• Settlement data

Make sure nothing is missing. It is better to ask twice than to worry that something is wrong later. It is important that the new accounting firm confirms the receipt of the documents. This can make you feel sure that the entire process ended up positively.

5. Power of attorney for the new accountancy firm

Nothing happens by itself, so if you want your new accountancy firm to represent you before authorities (e.g. at the tax office or the Social Security Agency), remember to submit the relevant power of attorney (UPL-1).

This power of attorney includes:

• Presence before the authorities on behalf of the entrepreneur
• Sending tax and social security declarations and returns
• Other accounting-related formalities

6. Change of accountancy firm – notification to CEIDG

This is not yet the end of the formalities. Such changes must be reported to the Central Register of Business Activity and Information (CEIDG). It is not complicated and you can easily do it online.

How do I report the change?

1. Submit the CEIDG-1 form online or at the town/municipality hall/office.
2. In the accounts section, enter the details of the new firm.
3. The changes should be updated within 7 days.

7. Updating data at the tax office and social security authorities

The final stage involves updating the data at the tax office and with Social Security. Once you have reported the change, remember also to make sure that the firm has also completed all the formalities.

Is it worth switching to an online accountancy firm?

Like any other agreement, an agreement with an accountancy firm should be satisfactory to both parties. Long-term dissatisfaction neither does the daily work easier, nor – even more so – allows the business to grow properly. Today, more and more entrepreneurs decide to work with accountancy firms which provide online services. It is a convenient solution which saves time and improves daily communication. In any case, it should be noted that a shared vision and willingness to cooperate should provide a good foundation for this. In case of doubts, you can always look for a firm which meets your needs. Do you have any questions? Feel free to contact us.