When to Switch Your Agency Accountant: 7 Signs It's Time

7 Signs It's Time to Switch Your Agency Accountant

1. They don't understand your business model

If you have to explain what a retainer is, why your revenue is recognised differently from a shop, or how media passthrough works for VAT purposes — your accountant doesn't understand agencies. This isn't their fault, but it means they can't give you useful advice.

2. You only hear from them at year-end

A good accountant is proactive. They should be reaching out with tax-saving opportunities, flagging cash flow concerns before they become problems, and keeping you informed about regulatory changes that affect agencies. If the only contact you get is a request for your records, that's a compliance service, not an advisory relationship.

3. Your management accounts are useless

If your monthly reports are just a generic profit and loss statement, they're not telling you anything actionable. Agency-specific management accounts should break down revenue by client, show project profitability, track utilisation, and highlight your gross margin trends. If you can't see which clients are profitable and which aren't, your reporting needs to improve.

4. They can't answer IR35 questions

Agencies rely heavily on contractors and freelancers. Off-payroll working rules (IR35) are complex and the penalties for getting them wrong are severe — backdated PAYE, National Insurance, and potential HMRC investigations. If your accountant can't confidently assess IR35 status or advise on contractor structures, you're exposed.

5. You're missing out on R&D tax credits

Many digital and creative agencies qualify for R&D tax credits without knowing it. If your team builds custom software, develops new technical solutions, or overcomes technological uncertainty, you could be claiming thousands back. A generalist accountant often doesn't know the rules well enough to identify qualifying work in a creative agency context.

6. Deadlines get missed or errors appear

Late filings, incorrect VAT returns, or HMRC penalties are unacceptable. These aren't just inconveniences — they cost you money and damage your credibility with HMRC. If mistakes are happening, your accountant is either overloaded or careless. Either way, it's time to move.

7. Fees keep rising without extra value

Annual fee increases are normal, but they should come with better service or additional support. If you're paying more each year for the same basic compliance work, you're not getting value for money. A specialist accountant who identifies tax savings through better structuring and industry-specific reliefs can often be worth more than any fee difference compared to a generalist who just files your returns.

How to Switch Accountants (It's Easier Than You Think)

Most agency owners put off switching because they think it will be disruptive. In practice, it's straightforward:

1. Choose your new accountant — have an initial consultation, agree on scope and fees
2. Your new accountant sends a professional clearance letter — this is a formal request to your existing accountant to confirm there are no reasons you shouldn't switch (required by ACCA/ICAEW rules)
3. Records are transferred — your existing accountant provides all working papers and records to your new firm
4. Onboarding — your new accountant sets up access to your accounting software (Xero, QuickBooks, etc.) and HMRC agent authorisation
5. Business as usual — typically within 2-4 weeks, you're fully transitioned with no disruption

Timing tip: The smoothest transitions happen after your year-end accounts have been filed. Avoid switching in January (self-assessment deadline) or the month your corporation tax return is due.

What to Look for in an Agency Accountant

When evaluating a new accountant, ask these questions:

• Do you work with other agencies? — Ideally they should specialise in or have significant experience with creative and marketing agencies
• How do you handle media passthrough for VAT? — This is a litmus test. If they hesitate, they don't know agencies
• What does your monthly reporting include? — You should expect client-level P&L, cash flow forecasts, and margin analysis at minimum
• Can you help with IR35 assessments? — Essential if you use contractors
• Do you proactively advise on tax planning? — You want someone who brings ideas to you, not just answers questions
• What software do you use? — Cloud-based accounting (Xero, QuickBooks) is non-negotiable in 2026

Frequently Asked Questions

How long does it take to switch accountants?

Most transitions take 2-4 weeks. Your new accountant handles the professional clearance process, contacts your existing firm, and transfers records. There's no gap in service if you plan the switch outside of year-end deadlines.

Can I switch accountants mid-year?

Yes, you can switch at any time. However, the smoothest transitions happen outside of busy periods. Your new accountant will pick up from wherever your current accountant left off.

What do I need to switch accountants?

Your new accountant needs your company registration number, UTR (Unique Taxpayer Reference), access to your accounting software, and authority to contact HMRC on your behalf. They'll handle the rest.