if partner compensation is the single most critical and sensitive aspect of cpa firm practice management today, then a close second is partner retirements and buyouts – the money partners receive for the purchase of their ownership in the firm when they retire or leave the firm due to death, disability, withdrawal or expulsion.
the amount of money involved is quite significant. roughly 80% of all firms consider the value of the firm to include: read more →
cpa firms are wrestling their way through partner retirements and the accompanying succession issues in numbers that the profession has never seen before. it’s the baby boomer bubble, up close and personal.
our succession planning should focus on replacing that retiring partner’s contribution on several fronts. depending on the role of the retiring partner in the firm we will experience varying levels of pain surrounding things like replacing significant knowledge or technical expertise, back-filling a block of hours to get the work done and shoring up voids left in firm leadership. these are all significant issues and deserve a plan of their own.
but the biggie is the transition of client relationships. read more →
i received two related questions, which i’ll answer together.
first question: i am nearing retirement and want to sell my practice to two longtime staff people, but they don’t get along, and i’m afraid to sell to them. what should i do?
second question: i have a large individual tax practice, but also have an audit practice that is handled by different staff in my firm. how do i sell this practice? none of the larger buyers want the tax clients and none of the smaller buyers want the audit clients. read more →
plus: key considerations in evaluating a practice continuation agreement
by ed mendlowitz
question: what i should do about merging? i need a specific answer.
answer: i can’t give you an easy answer. i can give you a process to follow that should provide an answer. actually, this works pretty well and i’ve gotten good feedback from many colleagues. i’ve also rethought it many times, and still think this is the way to go about it.
and what to do about it if you want to buy their practice. what is it about the sole practitioner that prevents them from doing something that seems to make so much sense? they need to do something soon about … continued
accounting firm marketers – already tasked with landing new clients and adding new revenue, in addition to recruiting new staffers – are getting a new job: succession planning.
a new survey of 100 marketers shows 35% cite “the identification and development of potential successors for retiring managing partners as their top priority over the next 12 months.”
the new data suggests turnover among managing partners in the next 12 months will be far greater than anyone now imagines and it speaks to the critical inadequacy of incumbent partner teams to deal with the crisis on their own.
the survey was conducted among members of the bkr international network of firms by tierney coaching & consulting. here, lisa tierney reports on the results and the implications.
her report includes data and commentary on:
leadership as a top concern for firms
five challenges to be considered over the next 10 years
how a firm’s success is integral to the effective leadership of its professionals
the definition of effective leadership as it applies to the successful firm
it’s common sense that the key to succession planning is developing future leaders, a practice at which the vast majority of cpa firms billing under $15-million-a year struggle with.
how to brace yourself for the “baby boomer bubble.”
by gary adamson, cpa
i think about the bbb a lot. no, this bbb is not the better business bureau; it is the baby boomer bubble. there is constant reference by the news media about the aging of the baby boomers but i for one did not know exactly what it meant. until i googled it.
what i found is not good news for the accounting profession. the bbb is 76 million of us born in the united states between 1946 and 1964 and we are fairly evenly spread through those 19 years. that means the oldest of this huge bubble are 4 million folks who turned 65 last year. and, we have another 18 years to go! read more →
one of the most difficult events that a firm faces is the transition of power from one managing partner to another, especially when it’s the first time. knowing when to pass the baton and how to pass it are critical decisions every firm will have to make.
for the managing partner who is thinking about succession, there are four primary goals that he or she should be working on during the next few years. each of these issues needs to be discussed with your founding partner: read more →
here’s how to get started today with four questions to know when you’re ready.
by august j. aquila
it used to be that death and taxes were the only two inevitable events in life. but for owners of accounting practices there is a third – succession. there is no greater threat to the future of accounting firms than the failure to plan for succession.
most firms are faced with the dilemma of keeping long term managers who are major contributors to the firm but for whatever reason are not ready to be equity partners (or who perhaps never will have what it takes to be equity partners).
here is a seven-point outline of what the no-equity position looks like, how it differs from the normal equity partner spot and some considerations to implement it in your firm.
i do, however, have some solid suggestions that may help you work through the problem. and, if you start sooner than later, you will have a better chance of successfully passing the baton to someone else.
how do i know it’s time to sell or merge? there is perhaps one key indicator that it’s time for you to move on or do something else. i call it the “fun factor.”
1. ask yourself these simple questions: read more →
