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Written by Christian Brim of wp.myemployeesolution.com
Helping Small Businesses Eliminate Employee Headaches. Over 20+ years of hands-on experience.
The most common complaints I hear about accountants/CPAs are "My accountant messed up my taxes" or "My accountant won't return my calls." So you're fed up, ready to make a change, and now you want to know, how do I fire my accountant?
When I ran my small business accounting firm, the first question I would ask someone seeking to make a change with their accountant was, "How long have you had this CPA?" I ask this because often the reaction to change is just that, a reaction. Without any further thought or setting of expectations, the small business owner will likely be in the same situation in another two years.
Why Do You Want to Fire Your Accountant?
If the answer is that they screwed up your taxes, take a deep breath. What caused the screw-up? Rarely are there computation errors. Computers don't make many computational mistakes, and when they do it is often operator error. The whole "It doesn't take a genius to file your taxes" is true for many taxpayers, but rarely is it true for small business owners. People make mistakes, including accountants. Discuss the issue with them and make sure YOU understand the problem and options to fix it.
Often the accountant can obtain penalty and interest relief, and remember they're not responsible for the taxes. You would have owed them anyway. Complain to Congress or your state legislature!
Now if there is a pattern of errors, that's another matter. But remember, you have to have a good relationship with your accountant. That means it's a two-way street. Is there anything that you can do better (e.g. communication, timing) to help him do his job better?
Reasons You Should Change Accountants
Communication
Let's face it, you don't have to like your accountant, but you do need to be able to communicate with her. If your relationship doesn't involve regular conversations about your business, where the CPA asks some questions, then there are going to be problems. If there is no communication, they cannot possibly serve your business, no matter how technically skilled they may be.
And this goes both ways. You must be willing to pick up the phone or email and ask questions proactively, not after the fact. If you call your CPA and tell them, "Hey this is what I did, what can you do with my taxes?" you don't leave her many options.
Doesn't Seem to Care
This is a common problem with accountants, primarily because most of them are overworked. Of course, the solution for that is to charge more, but you probably don't want to hear that. Maybe they need additional staff or are nearing retirement. If they're too busy to return your call or email, then they're too busy to do your work. Period.
Specialists
There are specialties in accounting just like any other profession. Small business owners oftentimes are convinced that their situation is simple. It probably isn't. Just because you don't know about it doesn't mean it doesn't exist! What you don't know you don't know can have tragic consequences.
Unfortunately, many accountants still try to be too many different things for too many people. If you can, find someone who has worked in your industry, and if not, make sure that they have experience with a lot of different small business industries.
Succession Planning
Often ignored is the plight of the single-person accounting firm. What happens when they're sick, or on vacation? Who will handle your stuff? What happens if she dies unexpectedly? Believe me, it happens, and then there is no one that knows your situation at all.
Better to make a change when it is convenient for you. Unless you need a specific specialist or have no other alternative, I strongly recommend not using a one-man/woman shop. Too much risk.
So How Do I Change Accountants?
Here are a few tips to make the change:
Already Have a Replacement
This may sound obvious, but don't go off half-cocked and put yourself in a worse situation. Take at least 60 days to find a replacement. Interview their existing clients. Find the fit for you.
Let the New Accountant Handle It
They do this all the time. You can sign a release that allows your new accountant to pick up all of your old records. Professional to professional, no emotions.
Timing
Don't do it in the middle of tax filing season (1st quarter). Summer is a good time to make the change unless that is seasonally bad for you. Although it is tempting to do something at year-end, make sure you have reasonable expectations as to what your new accountant can do.
They're not miracle workers, and my experience is it takes a full 12 months for the relationship to solidify after change.
Last thought. Pay for your accountant, and pay them well. A good one will make you multiples more than you pay them.
Photo Credit: iStock by Getty Images