Switching Startup Accountants: What to Expect and What to Prepare

Changing accountants starts with agreeing what changes, who handles each deadline and how records and access will move. The time involved depends on the condition of your records, work already underway and how quickly information becomes available.

If your startup has raised funding or started hiring, you may need more than annual accounts. Before choosing a new firm, be clear about the information you need to run the business.

Start with the gap you want to close

Perhaps your accounts are filed on time, but you still cannot explain why spending has increased or how your plans affect cash. Write down the decisions you need help with: hiring, controlling costs, preparing investor updates or planning the next funding round.

Annual statutory accounts cover a completed financial period and meet filing requirements. Management reporting gives you a regular view of current performance. Budgets and forecasts help you look ahead. Agree which of these you need, how often you will receive them and who will explain the numbers.

Compare the full scope and fee, including any catch-up work. A change of accountant is useful when it closes a specific gap in support.

Agree the handover before changing access

Check your existing engagement letter for notice terms, work in progress and fees. Ask both firms to confirm the handover date and their responsibilities in writing. A short list should cover:

• Who finishes the current annual accounts and Company Tax Return.

• Who prepares the next VAT return and runs payroll.

• Who handles the confirmation statement and other upcoming filings.

• Which bookkeeping periods are complete, and who resolves missing information.

• When the first management report or cash forecast will be ready.

For example, the outgoing firm might finish a year-end already underway while the incoming team takes over bookkeeping from an agreed date. That arrangement needs everyone’s agreement; do not assume it happens automatically.

Changing accountants does not remove a director’s responsibilities for company records and accounts. Keep sight of deadlines and approvals during the handover. GOV.UK explains directors’ responsibilities.

Prepare the records you already have

You do not need to organise every file perfectly before speaking to a new accountant. Start by identifying where information is held and what is missing. Useful records include:

• Recent annual accounts, tax returns and filing confirmations.

• Current bookkeeping records, bank statements and unpaid customer and supplier invoices.

• VAT and payroll records, including the latest submissions.

• Existing budgets, forecasts and board or investor reports.

• A list of accounting, payroll and expense systems, their administrators and subscription owners.

Ask the incoming firm what it needs from the outgoing accountant. Do not assume every internal working paper will transfer. Confirm access to the records your business needs, and keep a list of outstanding items.

Expect permission requests and professional enquiries

Your new accountant will normally ask for permission to contact the previous firm. You may hear this called “professional clearance”. ICAEW explains that it is a professional enquiry to help the incoming accountant decide whether to accept the work; the outgoing accountant does not grant permission to change firms. Authorise the two firms to communicate and share relevant handover information. Read ICAEW’s explanation of professional enquiries.

Transfer access safely

Use each software provider’s accountant invitation or user-access settings. Keep company-controlled administrator access where available. Confirm that records and exports are available before cancelling subscriptions or removing access needed to finish agreed work.

HMRC authorisation is a separate step: your new agent should explain the process for the relevant taxes. Do not share your HMRC sign-in credentials. Coordinate changes with the agreed filing responsibilities, and confirm when the outgoing firm’s authorisations should end. See HMRC’s guidance on authorising an agent and changing agent authorisation.

Make the first reporting period useful

Once records arrive, agree any corrections needed, the reporting timetable and what you need to provide each month. Separate missing historical records from improvements to future reporting. Ask for unresolved issues to be made clear, rather than treating the first report as a finished picture.

At Startup CFO, our Accounting package provides the records behind Reporting & planning and Finance leadership. We manage that accounting foundation as part of our ongoing service, and agree the handover and combined scope upfront.

If you are unsure what needs to change, start with a free Founder finance review. Understand where your current finance setup leaves gaps and what to improve first, before deciding whether to change accountants.