We assess the existing records, organise the handover and rebuild accounting data from available evidence, identifying corrections and outstanding filings.
A company changing accountants needs more than access to a new bookkeeping service. It needs a file that another professional can understand, continue and maintain without uncertainty about missing records, old system data or unresolved entries.
In one ARG matter, the client wanted the handover and reconstruction work to produce records that could remain useful after the transition. ARG combined the technical review with practical reconstruction and kept the work connected to the company’s wider finance process. The result was a better organised file and a clearer process for maintaining it. This is the central distinction for any business in the same position. A formal handover may be enough when records are complete, but missing or unusable information requires structured reconstruction as well.
ARG can help when you need to
Designate the recipient, commission and cut-off date under Article 14, with an inventory of records and unresolved tasks.
Provide ledgers, source documents, payroll, returns and acceptance receipts, plus authorised exports and access to the company’s systems.
Reconcile bank, cash, stock, counterparties, assets and taxes; identify the evidence behind each balance and any missing periods.
List impending deadlines and historical errors so current bookkeeping, reconstruction and amended filings have clear responsibilities.
An accounting takeover transfers the company’s records and unfinished obligations to a new responsible team. Article 14 of the Bulgarian Accounting Act expressly requires accounting documentation to be delivered to a person designated by the enterprise manager when the relevant employment, service or contractual relationship ends. The handover takes place in the presence of a commission under arrangements determined by management. This gives a foreign owner a concrete starting point: appoint the recipient, define the cut-off date and document what has actually arrived. The new accountant’s appointment does not itself confirm that earlier balances are correct or that previous returns were accepted.
In practice, an accounting takeover should identify every item that allows another professional to continue the file without guessing. That normally includes:
The legal point is simple. If the outgoing accountant held the working file, the enterprise must receive it in a form that can actually be used. A box of paper without registers, or software data without the source documents that support the entries, is not a complete takeover for a business that still has filing, audit, or inspection risk.
The key issue is not only replacement. It is continuity. The Accounting Act allows current accounting and preparation of interim, annual, and consolidated financial statements to be performed by employees, service providers, contract-based specialists, or accounting firms, but the enterprise itself remains responsible for the accounting system. That means a change of accountant creates a handover duty, not a transfer of liability.
For a client, this usually means one of three situations.
ARG’s work in this kind of assignment is to make that distinction early, because it changes both the cost and the order of work. A good takeover is therefore not just collection of files. It is a controlled review of what exists, what is missing, what can be trusted, and what must be recreated before the accounting process continues.
A proper takeover gives the new accountant a usable starting point and gives management evidence that it has organized the transfer responsibly. It also reduces the chance that later discrepancies will be treated as if they came from the new bookkeeping period when they actually originated earlier. That is especially important if the business works across borders, uses foreign suppliers, or has several years of legacy data stored in different formats.
The practical test is whether another accountant can continue the file without rebuilding the same month twice.
If the answer is no, the client does not need only a handover. It needs takeover plus reconstruction.
Article 12 of the Accounting Act sets different retention periods: payroll registers for 50 years, accounting registers and financial statements including tax-control, audit and subsequent-inspection documents for 10 years, and remaining accounting information for three years, counted from 1 January of the following reporting period. Classify records by their actual function before disposal; an invoice supporting tax control should not simply be labelled a disposable three-year document. Reconstruction priorities also depend on urgent filing deadlines and missing evidence. A VAT return due now or an unresolved bank balance may require immediate work alongside preservation of the long-term payroll archive.
Payroll gaps are often the most urgent because they affect both accounting continuity and long-term proof of employment and social-security history. If payroll records are missing, the business may still be able to continue current bookkeeping, but the missing file can affect later proof of remuneration, accruals, and employee history. That is why payroll reconstruction is usually the first priority when a company discovers that the previous accountant did not leave a complete archive.
Annual and interim financial statements, together with accounting registers, are the backbone of the file. They show how transactions were classified, closed, and carried forward. If those records are incomplete, the new accountant cannot reliably rebuild opening balances, compare years, or explain how a past number was formed. By contrast, a missing routine invoice or bank slip may sometimes be rebuilt from bank data, counterparty records, or other evidence later in the process. The statements and registers should therefore be checked first because they tell you whether the whole file is structurally sound.
The different retention periods are not just archive rules. They tell you what is most sensitive to loss and what must be protected first.
Build the reconstruction plan around both evidence and deadlines. Preserve payroll and employee records immediately, then identify the balances needed for the next filing: bank and cash, customer and supplier accounts, inventory, fixed assets, tax and owner transactions. A reconciliation should explain how each opening amount was formed and which documents remain missing. Keep the original export unchanged and record corrections separately, with the reason and supporting source. This protects the distinction between an error inherited from the previous period and a new posting made during reconstruction.
At the cut-off date, agree who completes the last VAT and payroll submissions, who answers existing authority requests and who closes the annual accounts. Record any invoices received after handover and the person responsible for passing them on. A clear division prevents both accountants assuming that the other has filed an outstanding return, and avoids the same transaction being entered twice in overlapping systems. Keep the final accepted submissions in the handover archive.
Tell us where you live, how your business works and what you want to change. We will help you identify the questions to resolve and the next steps to consider.
The legal responsibility stays with the enterprise manager, even after the accountant changes. The Bulgarian Accounting Act [ЗС] makes the manager responsible for organising the accounting system, approving the chart of accounts, approving the accounting form, and ensuring the preparation, content, publication, storage, and movement of accounting documents. The Ministry of Finance’s current consolidated text confirms that this duty does not move to the outgoing accountant or the replacement firm. Ministry of Finance consolidated Accounting Act text
That matters in practice because a takeover is not valid just because a new accountant is hired. Management must authorise the handover, decide who receives the file, and set the priorities for remediation. If the old file is incomplete, the manager has to decide whether the first step is a formal handover, immediate reconstruction, or a staged process in which the clean parts are accepted first and the damaged parts are rebuilt separately.
ARG would first check whether the company’s own internal setup matches the legal duty that remains with management. That means looking at the current chart of accounts, the accounting policy, the document flow, the storage method, and the publication status of the annual reporting file. If these are not aligned, the issue is not only a bookkeeping problem. It is a governance problem, because the manager has to be able to show that the accounting system was organised and controlled properly.
For a client, the decision point is simple. If the manager can still approve the takeover and identify the missing materials, the file can usually be stabilised. If the manager cannot say who last held the records, who approved the accounting form, or where the annual statements stand, the reconstruction work has to start with authority and control, not with posting entries.
The practical rule is that the new accountant can continue the file, but the manager must still own the responsibility.
That is why ARG treats this service as a coordination task as much as a technical one. It helps the client decide who must sign off on the takeover, what must be corrected first, and which parts of the accounting file can be safely relied on immediately.
Article 5(2) of the current Accounting Act requires incoming foreign-language documents to be translated into Bulgarian where a law requires it; it does not impose a blanket translation rule on every foreign invoice with an automatic VAT-document exception. Article 9 requires accounting software data and outputs in Bulgarian. Preserve the original document, identify the transaction, currency and parties, and arrange the translation or explanation needed for the applicable procedure. For a foreign system, obtain a usable ledger export and account mapping, not only a PDF balance sheet. The new accountant must be able to follow individual entries back to the supporting records.
That creates a clear reconstruction sequence. First, identify which documents are evidence of the transaction itself and which are only supporting system outputs. Then decide which items can be kept as they are, which need translation, and which must be recreated from other records. A foreign supplier invoice may be usable once the transaction content is translated. A system export may help, but it is not enough on its own if it cannot produce the processed data in Bulgarian in a form the new accountant can work with.
The main problem is not always that a document is missing. Often the problem is that the file exists, but it cannot be tied back to a clear source. If the only surviving material is a ledger extract with no invoice, no bank line, and no explanation of the posting, the new accountant may be able to note the gap, but not to reconstruct the transaction with confidence. The same is true when old software data can be opened but not meaningfully read, sorted, or linked to the underlying entries.
A useful way to approach this is to separate the file into three groups.
A missing invoice, an unreadable export and an incorrectly filed return require different remedies. Obtain a duplicate document from the issuer where possible; re-export software data with transaction identifiers and account detail; assess a tax correction under the rule for that return and period. Do not change an old invoice or invent a substitute date to make the current ledger balance. Keep a discrepancy list showing the amount, period, available evidence, responsible person and next action so that unresolved items remain visible until supported.
For VAT, Article 126 distinguishes the timing and type of correction. Before the filing deadline, the corrected return and registers can replace the submitted set. After it, omitted documents and incorrectly recorded documents follow different procedures, including current-period recording or written notification to the revenue authority as applicable. Corporate-tax errors have their own route under Article 75 of the Corporate Income Tax Act. The handover should therefore list every affected filing separately, rather than treating a correcting journal entry as proof that the tax position has also been corrected.
If the company has no successor, payroll records are treated separately from the rest of the accounting archive. The Bulgarian Accounting Act [ЗС] provides that payroll records must be transferred to the National Social Security Institute under the Social Security Code when the enterprise is terminated or has no successor. Other accounting information may be stored in private or state archives under the Archives Act, provided the statutory retention periods are respected. Ministry of Finance text on storage and transfer
That separation matters because payroll is not just another folder in the archive. It is the part of the file with the longest retention period, and if the company disappears without a successor, the law routes those records to the institution that can still preserve their social-security value. The rest of the archive can follow a different path, but only if the company still respects the retention rules that apply to each record group.
ARG would normally ask the client to prepare the archive in this order.
The practical consequence is that a company should not wait until closure to discover that payroll or core registers are incomplete. If the business is still operating, the best next step is to organise the archive now, label the record groups correctly, and decide what must remain at the company and what may be transferred elsewhere. That protects both continuity and later proof.
For a client, the key takeaway is that archive work is not only storage work. It is a legal sorting exercise. The wrong separation can leave payroll unavailable where it must be preserved, or leave other records trapped in the business when a lawful transfer or external archive would have been more efficient.
Compare the related procedures in this category, including their requirements and the stage at which you need them.
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