Switching Bookkeepers? Why January 1 Is the Cleanest Time
Most owners who want to switch bookkeepers have been thinking about it for a while. The books are always behind, the reports don’t answer the questions you’re asking, or the CPA keeps sending back the same list of problems every spring. It usually takes a bad month to finally make the call, and by then it’s easy to rush it.
If you’re anywhere close to that point, the start of a new year is the cleanest time to make the change, and the decision needs to happen in the next month or two for it to go smoothly. Here’s why, and how to do it without losing anything along the way.
Signs It’s Time
- The books are regularly two or more months behind.
- You get reports, but nobody can explain them to you in plain language.
- Your cash balance or loan balances on the books don’t match your statements.
- There’s a growing pile in “Uncategorized” or “Ask My Accountant.”
- Your CPA spends every tax season cleaning things up, and bills you for it.
- The business has outgrown what your current bookkeeper knows how to do, like job costing, service lines, or multiple locations.
None of those make your current bookkeeper a bad person. Sometimes a business grows past what a part-time setup was built for, and that’s a good problem to have.
Why January 1 Works Best
- One set of hands for the whole year. Your old bookkeeper finishes the current year, and your new one starts with January. Nobody has to untangle who recorded what in the middle of a year.
- Year-end stays with the person who knows it. The old bookkeeper closes December and hands your CPA a finished year, since they’re the one who recorded it.
- Payroll and year-end forms don’t get split. If payroll is moving too, starting fresh in January keeps a full year of payroll and year-end reporting with one provider.
- Clean comparisons. Next year’s numbers get built one way from day one, so when you compare months or look at the year as a whole, everything lines up.
The Timeline
| When | What happens |
|---|---|
| October | Decide to switch. Interview a few bookkeepers or firms. Ask the questions in How to Find the Right Bookkeeper for a Trades Business. |
| November | Pick one and sign on. Make sure you have admin access to your own accounting software. Tell your CPA about the change. |
| December | Your old bookkeeper closes November and pulls together the handoff list below. Your new bookkeeper gets access and sets up anything that needs to change for January, like service lines or job costing. |
| January | Your new bookkeeper starts recording January transactions. Your old bookkeeper closes December and the year. |
| February | The finished year goes to your CPA. Your new bookkeeper closes January on their normal schedule. |
If you wait until January to decide, you can still switch, but everything above gets squeezed into the busiest weeks of the year for both bookkeepers and your CPA.
What to Get From Your Old Bookkeeper
Before the handoff, make sure you have:
- Admin access to your QuickBooks or Xero file, in your name. You should own your accounting file, not your bookkeeper.
- Bank and credit card reconciliations through the last closed month
- A list of open items: unrecorded transactions, questions they were waiting on, anything half-finished
- Loan schedules or statements for every truck, equipment, and business loan
- Payroll reports for the year, and who handles year-end payroll forms
- The vendor and subcontractor list, with any W-9s they’ve collected
- A list of any recurring transactions, bank feeds, and apps connected to the books
- Where sales tax filings stand, if you collect sales tax
Most bookkeepers are professional about a handoff, especially when you give them time and a clear list. Asking in November instead of January goes a long way.
If the Books Are Already a Mess
Sometimes the reason for switching is that this year’s books aren’t in good enough shape to hand to a CPA. In that case, the switch usually comes in two parts: a cleanup of this year’s books, done over December through February so the CPA gets something accurate, and monthly bookkeeping starting in January. It’s more work up front, but it’s a lot better than starting the new year on top of a year nobody trusts.
If You Can’t Wait for January
Switching mid-year is fine too, especially if the current situation is causing real problems. The next cleanest point is the end of a quarter, and after that the end of any month. The same handoff list applies. It just helps to be clear about which months each bookkeeper is responsible for.
Common Mistakes
- Letting the bookkeeper own the software subscription. If they leave and the subscription is in their name, getting your own books back can be a headache.
- No overlap. The old bookkeeper stops before the new one has what they need. A few weeks of both having access makes a big difference.
- Not telling the CPA. Your CPA needs to know who to call for year-end questions.
- Switching and changing nothing else. A new bookkeeper is the best chance you’ll get to set up job costing, service lines, or cleaner payroll categories. It’s much easier to build that on January 1st than to change it in June.
Where to Start
If you want one thing to do this week, log into your accounting software and check who’s listed as the primary admin. If it isn’t you, fix that first, whether you switch bookkeepers or not.
If you’re thinking about a change and want to talk through what that would look like, a free Cash Clarity Call is an easy place to start. We’re happy to help you plan the switch, even if you end up going with someone else.
