Your accountant needs to understand you and your business, including who pays you, who you pay, and how to maximize your return on investment. They’re intimately involved in your financial decision-making, so the relationship must be built on a foundation of trust. But businesses evolve, and sometimes it’s just time to move on.
How can small business accounting services help you, and how do you know when you’ve outgrown your financial partner? We’ll touch on what accounting firms do, key signs that you should move on, pros and cons, and how to pull the trigger and hire a new firm that matches your growing company’s needs.
What Do Accounting Firms Do?
Accounting firms are staffed by skilled accounting professionals and certified public accountants (CPAs), who are licensed by the state board of accountancy—and hold a master’s degree—to perform financial recording and disclosure. They’re trained in specific ethics and laws to guide them in managing organizational financial dealings.
So, what do accounting firms do? Accounting firm services extend to the most important areas in finance and accounting, such as financial reporting, tax services, and CFO services. Examples of work accounting firms offer in these areas include:
- Balance Sheets
- Trial Balance Reconciliation
- Monthly Reviews of Company Performance
- Income Statements
- Custom Financial Reports
- Income Tax Preparation
- Irs Representation
- Tax Planning
- Entity Creation And Organization
- Audit Support
- Cash-Flow Forecasting
- Budget-to-Actual Reporting
- Break-Even Analysis
- Labor Cost Management
- Variable vs. Fixed Expense Reporting
- Debt Planning and Reduction
Business owners hire firms for both local and online accounting services, bolstering the pool of available professionals. They help you focus your efforts on what matters most: growing your business. Partnerships can last for years, but your needs will eventually change. The question is, how do you know when it’s time to break up with your financial partner and turn to a new accounting firm?
7 Signs It’s Time to Make a Switch
Businesses decide to make accounting changes for a wide variety of reasons. We’ve isolated several key reasons small-business owners start seeking accounting services elsewhere. If you’re experiencing these struggles, it may be time to switch to a new accounting firm.
1. They aren’t available when you need them.
Some business owners get frustrated when they can’t reach their accountant on the phone or even by email. Being able to easily contact your accountant helps you make the most informed business decisions in a timely manner.
2. They have an insufficient understanding of your industry or business.
Accountants who are not industry-specific may lack the foundational knowledge to fully understand client needs. When clients feel like their accountant just isn’t getting their specific business needs, they may start looking for firms that specialize in their industry.
3. You’re seeking proactive advice.
Basic bookkeeping services that only send out reminders to go over finances at tax time mean well, but they don’t offer proactive services to clients. Indeed, one of the main purposes of hiring small business accounting services is to get guidance on how to move forward with investments, maximize ROI, and boost income throughout the year. Accounting firm services should be able to help steer your business in the right direction—not just put out fires after the fact.
4. They lack approachability.
Sometimes, despite their best efforts, accountants can be intimidating. Those who consistently speak in jargon, talk down to business owners, or make them feel like they don’t understand their finances tend to lose clients.
5. They aren’t affordable.
Budget matters. If you’re paying too much for accounting services that aren’t meeting your needs, it’s time for a change. This applies to in-house accountants just as much as it does to firms that charge high fees and require cumbersome contracts.
6. They’re behind with technology.
Small-business owners often value technology to make processes more efficient and expect their accountants to do the same. If your accounting firm is behind technologically, you might jump ship for a firm that can more efficiently service your business needs.
7. There have been changes in organizational structure.
It’s easy to get comfortable dealing with the same person. If a trusted accountant retires, passes away, or leaves the organization, it might provide an opportunity for a fresh start elsewhere.
Pros and Cons of Switching Accounting Firms
If you’ve had concerns about your current accounting services, 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 years.
- Pro: New accountants can help your business grow. If you’ve trusted the same small business accounting services for years, they may be out of touch with your business needs. Sometimes a fresh set of eyes can be particularly beneficial in achieving your goals. Plus, if you are exploring new lines of business, an industry-specific accountant can help with this transition.
- Con: Your current accountant knows your business. If you’ve been with your accountant for at least five years, they have specific insights into your business, capital expenditures, tax needs, ROI, and so forth. Because of this, it’s challenging to onboard someone new and reteach the essentials.
You’ve been overpaying for accounting services.
- Pro: You could save money. With a little research, you could find a firm that costs less and offers the functions you need. Small business accounting services help you save without sacrificing service quality. For example, Ignite Spot is typically 60 percent more affordable than hiring in-house staff!
- Con: You could lose out on valuable services. Cost should be secondary to the quality of services your accountant will provide. Be sure to evaluate their services and online reviews from past and current clients. Don’t switch only to find the cost savings comes from cutting corners.
Your current firm struggles with busy seasons, availability, and timeliness.
- 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 the time of year. Larger firms work with clients year-round whose fiscal years end at times other than Dec. 31. They have staff on hand to ensure clients seamlessly transfer from one fiscal year to the next, plus bandwidth to avoid bottlenecking at tax time, fiscal year-end, or other peak seasons.
- Con: Large firms often offer less personalized service. At massive accounting firms, you’re probably just a number. You may not even know the name of your accountant! If you prefer to speak on the phone with your accountant, it may be better to stay with a smaller firm or even an outsourced accounting firm such as Ignite Spot.
You experience poor customer service.
- Pro: New firms have knowledgeable, relatable experts. You don’t 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 give you a sense of the type of personalities you may be working with at a new firm.
- Con: Organizational structures are subject to change. While it’s important to find a new accountant who can provide the service you deserve, remember that your regular point of contact could leave the organization or be moved to a different part of the management structure. Here, you’ll need to decide if you can handle being moved to someone else or if it is advantageous to switch firms again.
Steps for Switching Small Business Accounting Services
How do you start the process of switching accountants? If you’ve only ever worked with one or two small business accounting services, transferring your business to a new firm can be confusing. Follow a few steps to make a clean break.
- Notify your current accountant that you’ve decided to move on. This gives them a chance to fix issues and save your business in advance of a transfer. If your concerns are fixable, this may save you time, stress, and effort. Even if your mind's made up, it’s still a good idea to notify them.
- 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 if an amicable file transfer is denied.
Once you’ve switched, continue to be mindful that your accounting partner is meeting your needs. If the relationship ever starts to sour, keep our advice in mind to assess new options.