How to Switch Accountants for Your Corporation in Canada

Changing accountants can feel like a bigger job than staying with one who is no longer a good fit. Your current accountant may know the history of your corporation and have access to its records. You may be unsure where to start without disrupting the business.

The transition can take more coordination if your accountant also handles bookkeeping or payroll. Start by finding out what work is underway and when the next deadlines fall.

When should you make the change?

You do not have to wait until your corporation’s year-end to change accountants. A move during the year may be relatively simple if the bookkeeping is current and no filings are in progress. Closer to a deadline, the incoming firm will need time to review the records before agreeing to take on the work. If a major filing deadline is only weeks away, do not assume a new firm can take over immediately.

A corporation required to file a Canadian T2 return generally has six months after its tax year-end to file. Any balance of tax owing is generally due two months after year-end, or three months for certain eligible Canadian-controlled private corporations. The filing and payment deadlines are separate. You can check the details in the CRA’s guidance on corporate filing dates and balance due dates.

If your corporation also files a Québec corporate income tax return, confirm the status and deadline of its CO-17 separately. Do not assume that handing off the federal T2 takes care of the Québec return.

If a return is already underway, ask the outgoing accountant what they intend to finish. Then ask the prospective firm whether it can take on the remaining work within the time available. The answer may depend on how complete the records are for the corporation.

What records will the new accountant need?

The most recent corporate tax return and if applicable, financial statements, are the starting point. The new accountant will also need to understand how the books are kept and what has happened since the last year-end.

If you use cloud bookkeeping software, confirm that the corporation controls the account and can continue accessing its records after the change. Ask the incoming firm what it needs from the outgoing accountant, including supporting information for balances that carry forward from prior years. An incomplete bookkeeping file can take time to reconcile, so identify any gaps before agreeing on a start date or fee.

Ask for copies or exports of the accounting data and supporting documents needed to continue the work. An accountant’s internal working papers may be treated differently from the corporation’s records. The incoming firm can help identify what information it needs if you are unsure what to request.

Who is handling the next payment or filing?

If your accountant handles payroll, confirm who will process the next pay run and remit the related payroll deductions.

The same handoff applies to GST/HST filings and, where applicable, QST filings.

If your corporation pays income tax by instalments, confirm when the next payment is due and what has already been paid. A change in firms should not leave either side assuming someone else is looking after an upcoming obligation.

What happens to tax account access?

Changing firms does not automatically change who is authorized to deal with the Canada Revenue Agency or Revenu Québec for your corporation. You can generally authorize and remove representatives through CRA My Business Account.

For a Québec corporation, review access and authorizations with Revenu Québec as a separate step through the corporation’s My Account for businesses.

Arrange the new firm’s access when it needs to review the corporation’s account, and consider when the former firm’s access should end. If there is an open CRA or Revenu Québec inquiry, make sure someone is responsible for responding while the change takes place. The corporation’s filing obligations continue regardless of which accountant is engaged.

What should you discuss before engaging the new firm?

Ask what the proposed fee covers. Corporate tax work, bookkeeping, and payroll often have separate scopes and fees. If the books need to be brought up to date or a prior filing needs attention, ask about that work before assuming it is included in a standard year-end engagement.

Before switching, be clear about what is not working with your current arrangement. You may want more advice during the year, more dependable bookkeeping support, or better coordination between your corporate and personal tax matters. Discuss those expectations before moving ahead.

Some business owners also want advice on broader decisions, such as how to pay themselves from their corporation or how the business fits into their retirement plans. Where appropriate, corporate tax and accounting work can be coordinated with financial planning through Objective Financial Partners.

Make the responsibilities clear

Before the change is complete, confirm who will prepare the next return and who will handle any work already in progress. Make sure your corporation retains access to its bookkeeping records and knows whom to contact about upcoming filings.

If you are considering a change, contact Objective Tax & Accounting for an introductory call. Tell us your corporation’s year-end, whether it files in Québec, and what work is currently underway. We can discuss timing and whether a transition is practical.

 

This article provides general information for Canadian incorporated business owners. Filing obligations and transition needs depend on the corporation’s circumstances.