This is one of the most common ways in which a foreign-owned Estonian company can get into trouble, but it is rarely talked about. The accountant suddenly stops communicating: he gets sick, retires, changes his field of activity or simply stops responding. The owner of the company, who is often abroad, only discovers later that reports have not been submitted and taxes have not been declared. Sometimes the problem is different: the accounting has been kept, but its quality no longer inspires confidence.
Before you panic, it's worth remembering two important things.
First, in Estonia, the ultimate responsibility for accounting and reporting always lies with the company’s management. This means that the responsibility remains with you regardless of who you have hired to do the work. This may seem inconvenient, but it also gives you control: the situation can be resolved without waiting for the missing service provider to return.
Second, changing accountants is a normal process. If done in the right order, the transition will go smoothly. However, decisions made in haste can create the very problems you wanted to avoid.
Below, we will take a step-by-step look at how to safely carry out the exchange.
Need help?
Do you want to change accountants or need help restoring your company's accounting?
Sometimes a well-organized transfer is enough. Sometimes several years of accounting must be restored. In both cases, the most important thing is to act in the right order.
Need help changing accountants?
Do you want to assess whether this is a normal service provider change or a more complex restoration project before making a decision?
We explain which documents need to be secured first, how to organize a safe transfer, and in what order to resolve problems.
Your accountant disappeared (or the diaries are mixed up): how to safely change accountants in Estonia?
This is one of the most common ways in which a foreign-owned Estonian company can get into trouble, but it is rarely talked about. The accountant suddenly stops communicating: he gets sick, retires, changes his field of activity or simply stops responding. The owner of the company, who is often abroad, only discovers later that reports have not been submitted and taxes have not been declared. Sometimes the problem is different: the accounting has been kept, but its quality no longer inspires confidence.
Before you panic, it's worth remembering two important things.
First, in Estonia, the ultimate responsibility for accounting and reporting always lies with the company’s management. This means that the responsibility remains with you regardless of who you have hired to do the work. This may seem inconvenient, but it also gives you control: the situation can be resolved without waiting for the missing service provider to return.
Second, changing accountants is a normal process. If done in the right order, the transition will go smoothly. However, decisions made in haste can create the very problems you wanted to avoid.
Below, we will take a step-by-step look at how to safely carry out the exchange.
Signs that it's really time to change
Not every disagreement means you need to change providers, but the following signs indicate that a change is likely necessary.
No answers coming.
If an accountant doesn't respond for days or weeks, especially before important deadlines, it's a serious warning sign. In this industry, silence often carries more risk than bad news.
Submissions are delayed
If you learn about the delay in reports or declarations from the Tax and Customs Board or the Commercial Register, and not from your accountant, the relationship of trust has been seriously damaged.
There is no replacement.
If the entire service depends on one person, illness, vacation, or resignation can halt the entire company's accounting.
Visible errors
If you notice discrepancies in your numbers, VAT calculations, or net worth, and no one has informed you of the problems before, it is worth reassessing the situation.
No preventive counseling
A good accountant doesn't just enter data. They point out risks and help prevent problems before they become violations.
If you recognize several of these situations, the main question is no longer whether to change service providers, but how to do it in a way that ensures that the company's obligations are fulfilled correctly.
Before you trade: secure what's yours
The biggest mistake is to end the collaboration before the company's important data and access are regained.
1. Accounting data
Make sure you get the general ledger, accounting files, historical data, and other accounting information for your company. They belong to your company: under the Accounting Act (RPS § 12) the company itself is the accounting entity that has to preserve them, for seven years from the end of the financial year.
2. Original documents
Gather invoices, contracts, bank statements, payroll documents, and other source documentation. Ideally, you already have these, but in practice, some of them may be located at the service provider.
3. Access points
Check access to the Tax and Customs Board's e-services, the commercial register, accounting software and other systems important to the company. If necessary, reassign authorizations and remove access from the former service provider.
4. Clear overview of the situation
Find out which reports and declarations have been submitted, which are pending, and for which period the accounting is in order. If possible, ask for this overview in writing.
If the service provider has indeed disappeared and the documents cannot be retrieved, this does not mean a deadlock. In this case, the accounting must be restored based on existing bank statements, contracts and documents from the transaction partners. This is more complicated than a normal transfer, but it is completely solvable.
How to safely change accountants
If you have decided to change service providers, the most important thing is to avoid a situation where the company's obligations are not fulfilled during the transition.
1. Find a new service provider before ending the old cooperation
Don't leave your company without functioning accounting for a moment. If a new partner is in place before the old contract expires, the transfer can be done smoothly and without interruption.
2. Agree on a clear handover date
The best time to switch is at the end of the month or financial year. This way, it is clear which service provider is responsible for a specific reporting or declaration period.
A handover in the middle of a reporting period is not impossible, but it requires a very precise division of responsibility.
3. Have the new service provider verify the initial status
A new accountant should check the following before continuing work:
- opening balances;
- ledger;
- VAT accounting;
- net asset position;
- previous reports.
Errors discovered early are usually quickly correctable. Later, the same errors can affect subsequent reports and tax returns.
4. Assign a specific person responsible for each obligation
During the transition period, it must be clearly agreed:
- who submits the annual report;
- who files tax returns;
- what deadlines apply;
- who is responsible for completing work in progress.
The most problems arise in a situation where both service providers expect the necessary action to be performed "on the other side".
5. Change accesses
Once the transfer is complete:
- renew credentials;
- remove unnecessary accesses;
- Check that all important systems of the company are managed by the new service provider.
A properly organized exchange will remain virtually unnoticeable to the registry and the Tax and Customs Board. This is the goal of a well-executed transfer.
When it's no longer exchange, but salvation
Sometimes it only becomes clear after reviewing the documents that the problem is bigger than changing service providers.
Examples may include:
- several years without submitting annual reports;
- tax return deficiencies;
- incomplete original documents;
- net worth issues;
- registration or supervision procedures that have already begun.
In this case, a normal transfer is no longer sufficient. It is necessary to restore the company's accounting.
Restoration work is usually carried out in the following order.
- All unsubmitted reports and declarations are mapped.
- Missing documents are restored based on bank statements and transaction partner documents.
- Previous mistakes are being corrected.
- Reports are presented in correct chronological order.
- Any issues related to net worth, registry, or tax authorities will be resolved.
It is important to avoid rushing. Reports submitted in the wrong order can create new inconsistencies and prolong the entire procedure.
How to choose your next accountant?
The best way to avoid a similar situation is to choose a service provider whose work organization minimizes such risks from the very beginning.
Before signing a contract, it is worth asking at least the following questions.
- Does the service have a working replacement if the person in charge is absent?
- Is the customer warned of problems before deadlines pass?
- Are the taken over accounting records thoroughly reviewed before work begins?
- Has the responsibility for submitting reports and declarations been agreed in writing?
- Is customer communication conducted in understandable language and with a reasonable response time?
A service provider who can clearly answer these questions will significantly reduce the likelihood of the same situation happening again.
FAQ
My accountant disappeared and won't return the company documents. What should I do?
First, try to obtain all of the company's accounting data, source documents, and access records. These are part of your company's operations and their transfer must be arranged in accordance with applicable law. The seven year duty to preserve them stays with the company, whoever keeps the books (RPS § 12).
If you can no longer contact your service provider, it does not mean that your business is at a standstill. It is possible to restore your accounting using bank statements, contracts, and other existing documents.
Who is responsible if reports are not submitted?
Legally, the company's management is always responsible for submitting reports and declarations.
If the service provider fails to fulfill its obligations, a contractual claim may arise against it. However, this does not relieve the board of directors from their obligation to ensure that the company's reporting is in order.
Can you change accountants in the middle of the financial year?
Yes. In practice, it is easiest to make the transfer at the end of the month or financial year, but if necessary, the service provider can also be changed in the middle of the period. In this case, it must be agreed in writing who is responsible for submitting each report and declaration.
What if the previous accountant made mistakes?
Before continuing work, the new service provider should review opening balances, previous reports, and key calculations.
The earlier defects are discovered, the easier and cheaper it is to fix them. This is why a baseline inspection is an essential part of a professional handover.
I discovered that reports have not been submitted for several years. Is this still a normal exchange?
Mostly not.
In such a situation, it is an accounting restoration project. First, the missing reports and documents must be mapped and then the accounting must be restored in the correct order. Only then can the company continue with its normal accounting.
How to avoid the same situation in the future?
Choose a service provider that has a functioning team, a clear replacement system, and a habit of informing customers about problems in advance.
It is also worth agreeing in writing at the beginning of the cooperation:
- who is responsible for submitting reports;
- how documents are transferred;
- how access is organised;
- What is the usual response time?
These agreements significantly reduce the risk that the company will find itself in the same situation again.
Related reading
[Late annual report in Estonia; Cheap app or expert?; What does accounting for an Estonian company really cost? (26)]
Need help?
Do you want to change accountants or need help restoring your company's accounting?
Sometimes a well-organized transfer is enough. Sometimes several years of accounting must be restored. In both cases, the most important thing is to act in the right order.
Need help changing accountants?
Do you want to assess whether this is a normal change of service provider or a more complex restoration project before making a decision?
We explain which documents need to be secured first, how to organize a safe transfer, and in what order to resolve problems.