Cost of Switching Accountants Calculator
Changing accountants costs something once and saves something every year after. Work out the transition cost, the new annual fee, the break-even month, the best date to move and the three-year saving.
three-year saving
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The One-Time Transition Cost
| Item | Why It Is Needed | Amount |
|---|
The New Annual Fee
| Service | Basis | Annual |
|---|
First Year and Beyond
| Period | Basis | Net Position |
|---|
When to Move
| Timing | Effect |
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Points That Decide This
What to Do Next
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Disclaimer: Fees shown are indicative fixed-fee amounts for planning purposes, quoted in Canadian dollars and including HST, and are confirmed in writing before any engagement begins. Actual fees depend on the condition of the records and the scope agreed. Under CPA professional standards an incoming accountant must communicate with the predecessor before accepting an engagement, and the predecessor is required to respond and to make relevant information available. Books and records belong to the client rather than to the accountant, though an accountant may in some circumstances assert a lien over their own working papers in respect of unpaid fees. A change of accountant does not require the CRA’s permission; authorisation is updated by the new representative through Represent a Client. Bookkeeping is done on an annual basis by default, which is the pattern most owner-managed corporations are best served by. This page is general information, not tax advice, and is not a quote.
The Transition Cost Is Real, and It Is Once
Most of what people fear about switching is imaginary. The part that is real is that the new firm has to establish opening balances it can stand behind, and where the bookkeeping is behind it has to be caught up before anything else can happen.
Everything else is quick. A cloud accounting file moves in minutes. CRA authorisation is updated online. The professional clearance letter is a formality between two firms that neither client needs to be involved in.
| Item | Real Cost |
|---|---|
| Transferring a QuickBooks or Xero file | Minutes, no fee |
| Updating CRA authorisation | Online, no fee |
| Professional clearance letter | Between the firms, no fee |
| Verifying opening balances | A real piece of work |
| Catch-up bookkeeping | The largest item, and it was owed anyway |
Catch-up bookkeeping is not a cost of switching. It is work that had to be done regardless, and it appears on this page only because it usually surfaces at the moment of the move. If your books are five months behind, that is five months of work whoever does it.
Your Accountant Cannot Hold Your Records Hostage
Books and records belong to the client. A departing firm is required under professional standards to respond to the incoming accountant and to make relevant information available, and that obligation does not depend on how the relationship ended.
There is a narrow exception. A firm may in some circumstances assert a lien over its own working papers where fees are genuinely unpaid. That covers their internal papers, not your source documents, your general ledger or your filed returns.
Settle any genuinely outstanding invoice before you resign the engagement. Not because they can hold your records, but because an unpaid fee gives a departing firm every reason to be slow, and slowness is what actually costs you money in a transition.
The Best Time to Move Is Just After a Year End
Switching immediately after the year end has been completed and filed is cleanest, because the opening balances are verified, signed off and agreed by everyone. Nobody has to reconstruct anything.
Mid-year is entirely workable and slightly more expensive, since the new firm inherits a part-year position it did not build. The worst time is a few weeks before a filing deadline, when there is no room to do the verification properly.
| When You Move | Transition Effort |
|---|---|
| Right after the year end is filed | Lowest, balances already verified |
| Early in the fiscal year | Low |
| Mid-year | Moderate, part-year position inherited |
| Just before a deadline | Highest, no room to verify anything |
Price Is Usually Not the Real Reason
People search for the cost of switching accountants, and when they explain why, fee is rarely the first thing mentioned. It is almost always responsiveness.
- Emails that go unanswered for a week or more
- Returns filed at the deadline every year with no time to plan anything
- Surprise invoices for a phone call you did not know was billable
- No advice, only compliance, and never a conversation before a decision
- A different junior every year asking the same questions
- Finding out about a CRA letter from the CRA rather than from your accountant
Hourly billing is what causes most of this. When a phone call has a price, clients stop calling, and an accountant who only hears from you at year end cannot give you advice worth having. A fixed annual fee removes the meter and changes the relationship entirely.
The Handover, Step by Step
- Get the new engagement in writing, with the scope and the fixed fee agreed before anything moves
- Settle any outstanding invoice with the current firm
- Send a short written notice ending the engagement, courteous and brief
- The new firm sends the clearance letter and deals with the predecessor directly
- Transfer the accounting file and grant access to bank feeds and the CRA account
- Opening balances are verified against the last filed return
- Catch-up bookkeeping, where there is any
You are involved in steps one, two, three and five. The rest happens between the firms, and a well-run transition needs perhaps an hour of your time in total.
What to Ask Before You Sign Anywhere
- Is the fee fixed for the year, and what specifically does it include
- Are phone calls and emails billable, and if so at what point
- Who will actually do the work, and will it be the same person next year
- What is the normal response time to an email
- When will the year end be filed relative to the deadline
- What happens if the CRA writes, and is dealing with it included
What This Calculator Does Not Cover
- Unfiled returns from prior years, priced separately
- CRA audit representation where a review is already open
- Restructuring or planning work beyond annual compliance
- Corporate tax itself, which sits on top of every fee here
- Software subscription costs, which you pay directly
- Your time, which a good transition should barely touch
Ask for the fee in writing before you resign anywhere. Our pricing page sets out how we quote, and every engagement is a fixed annual fee including HST, confirmed in writing before we start.
Frequently Asked Questions
Common questions on changing accountants.
Related Calculators and Guides
More tools for owner-managed corporations.
Get the Fee in Writing Before You Resign Anywhere
Send us your last filed T2, your current fee and the state of the books. We will quote the whole year as one fixed fee including HST, handle the clearance letter and the file transfer, and tell you plainly if switching is not worth it.