How to switch bookkeeper without losing records.

Why handovers go wrong

Most problems come from one assumption: that the records are already yours and will simply carry on. Often they are, but not always. Common gaps include:

• The accounting software subscription is held under the old bookkeeper's account, not the business's own
• Receipts and invoices sit in the old bookkeeper's email or folders, not in the software
• Bank feeds, receipt apps and payroll were connected using the old bookkeeper's login
• Nobody has written down which transactions are still unexplained
• Both sides think the other is doing the next VAT return

None of these are hard to fix. They are just easy to miss when the old arrangement ends quickly.

Step 1: confirm who owns the software and the data

Start by checking where your books actually live. Log in yourself, not through your bookkeeper, and confirm:

• The subscription. Is it billed to your business, or to the bookkeeper's practice? If it is theirs, ask how the file will be moved into your own name before anything else changes.
• Your own login. You, or another director or owner, should have the highest level of access to the file.
• The history. Check that past years are in the file and not just the current one. Older years kept in a different system need exporting.

Software vendors each have their own process for transferring a subscription or file. Follow your vendor's help pages for this part, and do it while the old bookkeeper is still cooperative.

Step 2: list every login and connection

Bookkeeping touches more systems than the main ledger. Make a simple list of each one, who set it up, and whose login it uses. Typical items are:

• Accounting software such as Xero, QuickBooks, Sage, FreeAgent or VT Transaction+
• Bank feeds and any card or payment provider feeds
• Receipt capture tools such as Dext
• Payroll software, if payroll is done separately
• The connection used to submit VAT returns under Making Tax Digital
• Any finance or accounts email inbox where suppliers send invoices
• Shared drives or folders holding statements and paperwork
• Any authority the old bookkeeper has to deal with HMRC on your behalf

A connection set up under the old bookkeeper's login can stop working when their access is removed. A bank feed that quietly stops is one of the most common ways records go missing after a switch.

Step 3: invite the new bookkeeper as a user

Give your new bookkeeper their own user login from inside your software. Do not share your own password. Invited users give you three things that a shared password does not:

• You can see who has access and remove it at any time
• The software records who made each change
• You can give the right level of access, rather than full control by default

Do the same for receipt tools and any finance inbox. Then reconnect any feed that relied on the old bookkeeper's login, using your own login or the new bookkeeper's.

For HMRC, an agent must be authorised by you before they can deal with HMRC on your behalf. Your new adviser will tell you how to authorise them for the taxes they will handle.

When to remove the old bookkeeper

Remove the old bookkeeper's access only after the new one has confirmed they can see everything they need. Removing it on day one can cut off a feed or a receipt tool before anyone has noticed it depended on that login. Agree a short overlap, then close their access on a set date.

Step 4: ask for the right documents

Ask your old bookkeeper for a written handover. A short email list is enough. Useful items include:

• The last reconciled date for each bank and card account
• A list of open queries: unexplained payments, missing receipts and anything coded to a suspense account
• VAT return working papers for recent returns, and confirmation of which returns they filed
• Receipts and invoices held outside the software, in email or folders
• Lists of unpaid sales invoices and unpaid supplier bills at the handover date
• The latest year-end accounts and any adjustments posted after them
• Payroll, pension and CIS records, if they handled those
• Any agreed treatments, such as how a director's loan or a hire purchase agreement is recorded

The open queries list matters most. Without it, the new bookkeeper has to rediscover every loose end from the bank lines alone.

How long records must be kept

Switching bookkeeper does not change your duty to keep records. Make sure the documents end up somewhere you control.

• Limited companies must keep records for 6 years from the end of the last company financial year they relate to, and longer in some cases, such as during an HMRC compliance check. HMRC can fine a company £3,000 for not keeping them.
• Sole traders must keep records for at least 5 years after the 31 January submission deadline of the relevant tax year.
• VAT-registered businesses must keep VAT records for at least 6 years, including all purchase invoices received.

Our guide on how long to keep business records covers this in more detail.

Step 5: time the switch around your VAT quarter

If you are VAT registered, the timing of the switch matters more than anything else. The deadline for submitting a VAT return online is usually one calendar month and 7 days after the end of the period. Your payment must reach HMRC by the same deadline.

That gives three broad windows:

• Just after a return is filed. This is usually the cleanest point. The old bookkeeper finishes and files the return, and the new one starts a fresh quarter.
• Mid-quarter. This works if the books are reconciled up to the handover date. The new bookkeeper picks up from that date and prepares the next return.
• Between a quarter end and its deadline. This is the riskiest time. The return is due, and the person who knows the quarter is leaving. Avoid it if you can.

Whatever you choose, agree in writing who prepares and files each return. Name the period, not just "the next one".

A worked example

If you find mistakes in past returns

A new bookkeeper may spot errors in earlier VAT returns. You can correct errors in returns for the preceding 4 years. If the net value of the errors is £10,000 or less, or between £10,000 and £50,000 but less than 1% of your total sales, you can usually adjust it on your next return. Larger errors, and deliberate errors, must be reported to HMRC separately. Our guide on how to file a VAT return covers the return itself.

Step 6: check the books on the handover date

Before the new bookkeeper starts adding work, agree a starting position. On the handover date, check that:

• Each bank and card balance in the software matches the real statement
• The unpaid sales invoice and supplier bill lists look right to you
• VAT returns already filed match what the software shows for those periods
• Any suspense or unexplained items are listed, with an amount

If the software lets you lock periods that have already been filed, ask for the last filed VAT period to be locked. That stops old figures being changed by accident.

If the books turn out to be months behind, that is not unusual. The usual order is to bring them up to date first as a catch-up job, then start the regular routine from a reconciled position.

Handover checklist

• Software subscription is in the business's name, and you have your own top-level login
• Every login and feed is listed, with whose login it uses
• New bookkeeper invited as a user, with no shared passwords
• Feeds and receipt tools reconnected where needed
• Written handover received, including open queries
• Records and documents stored somewhere you control
• Agreement in writing on who files each VAT return
• Bank balances checked on the handover date
• Old bookkeeper's access removed on an agreed date

Do you need to change software as well?

Usually not. Changing bookkeeper and changing software are separate decisions, and doing both at once adds risk. A good bookkeeper should be able to work in the system you already use. If you want to compare what different arrangements cost, see our guide on how much a bookkeeper costs in the UK, and on daily vs monthly bookkeeping.