Changing accountants
A change is prepared during the year.
The easiest moment is mid-year, not after the closing. What decides the outcome is what passes from one hand to the other, and what gets reconciled before the first deadline.
What gets handed overA year is rarely lost in the change. It is lost in the handover.
In France, changing firms is governed by the profession’s own rules of conduct. The incoming firm makes contact with the outgoing one, and the outgoing firm returns the client’s papers. A written engagement letter, the “lettre de mission”, exists on both sides, and that is where the notice period is set.
The principle is settled quickly. The handover takes longer. Opening balances, open items, fixed assets with their depreciation, year-to-date payroll figures: every block has to end up identical on the other side. And a discrepancy shows at the first return, not at the closing.
We take those figures over, reconcile them before the first filing deadline and handle the correspondence with the outgoing firm. We work in French, German and English.
What the rules of conduct provide for
The change follows written rules, and they protect the client first.
- Contacting the outgoing firmThe incoming firm makes contact before accepting the engagement. That exchange is not permission to be sought, it is information to be given.
- Returning the papersWhat the client handed in belongs to the client. A dispute over fees does not justify holding back the accounts themselves.
- The engagement letterWritten and mandatory in France, it sets the scope and the notice period. It is the document to read before anything is announced.
What gets handed over
| Block | What it holds |
|---|---|
| General ledger | Trial balance, nominal ledger, journals and the “FEC” for the current year |
| Opening balances | Validated opening figures, reconciled against the last approved annual accounts |
| Receivables and payables | Open customer and supplier items, with their matching |
| Fixed assets | The asset schedule with depreciation and the useful lives applied |
| VAT | Returns for the year, any credits, and the sequence of invoice numbers |
| Payroll | Year-to-date figures, holiday balances and previous “DSN” filings, where payroll moves as well |
| Tax | The “liasses fiscales” of earlier years and the written positions behind them |
The block most often forgotten is the last one. Without the written positions from earlier years, the incoming firm reasons through a question that was already settled, and sometimes settles it differently.
How it runs
The change in four steps.
- 1Read the engagement letterIt sets the notice period and the scope of what has to be returned. That is the starting point, before any announcement.
- 2Fix the switch-over datePreferably at the end of a VAT period, so that no month is cut in half.
- 3Collect and reconcileThe blocks above, checked one after another. A discrepancy is easier to correct before the first return than after it.
- 4The first deadline in new handsThat is the test: if it passes with no rework, the switch held.
The deadline that counts first: the first VAT return after the switch. That is where a wrong opening balance or a broken number sequence shows up.
Frequently asked
On notice, papers and timing.
The questions foreign groups ask most often when a French subsidiary is considering a change of firm.
The framework
Does a change need a reason?
No. The engagement rests on a contract, and it ends on the terms set in the engagement letter. The notice period is written there, and it is the only constraint that really binds the calendar.
Can the outgoing firm hold back the accounts?
The papers you handed in belong to you, and a dispute over fees changes nothing about that.
The question is different for the firm’s own work product. In practice, a settled account before the switch removes the whole discussion.
Does any authority have to be told?
A change of firm is not filed with the registry. What changes are the mandates: access to the tax authorities’ online services and, where relevant, the appointment of the agent for electronic filings.
In practice
When is the best moment?
Mid-year, at the end of a VAT period. Waiting for the closing looks tidier and rarely is: the outgoing firm then finishes a year it will not follow, and the open questions get settled without it.
How long does the handover take?
Transferring the files is quick. Reconciling is not, and it depends on the state of the receivables and payables. The useful measure is not a duration but an event: the first return produced with no rework.
What if payroll changes at the same time?
Then there are two handovers, and the second is the more delicate one. Year-to-date figures, holiday balances, the agreement set up in the system and the previous “DSN” filings all have to arrive together. See payroll and HR
What goes with it
What the switch touches.
Next
Send us your engagement letter
and a trial balance.
The notice period is in the engagement letter, and the state of the open items says how much work the handover means. With those two documents the switch-over date can be fixed in one exchange. We work in French, German and English.
- FRADECO SAS · Paris
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50, Rue Chapon · 75003 Paris
+33 1 40 09 13 77 - FRADECO GmbH · Bonn
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Simrockstr. 92 · 53619 Rheinbreitbach
+49 2224 123 14 83