there are various sections that should be included in any succession plan. we are not going to present you with a sample succession plan, but even better, to describe topic areas you should address in your plan.
as always, there are various best practices to consider as you put your plan together. for any succession plan to work, you have to start with consideration of the business model you use: read more →
and that goes double for cpas. we’ve had it hard. when the recession hit, we lost clients. the clients we didn’t lose couldn’t afford fee increases. but the cost of software increased, and most hardware has had to be replaced twice since the recession first hit. salaries have gone up, too, especially among accountants, whose ranks have thinned in recent years. and the tax regulations get harder, the waiting time on the irs line longer, the reporting lengthier.
at long last, economic conditions seem to be improving enough for widespread increases in billing rates and fees. about 85 percent of respondents to the 卡塔尔世界杯常规比赛时间 study of pricing strategies and trends see an upward trend underway.
cpa dave murray at his eponymous firm in troy, ohio, is pushing through “significant increases.” he says, “our firm is increasingly being paid for our knowledge.” “yes,” he says, value pricing is becoming an important success strategy. “when it’s worth more to the client we charge more,” he says. and he does it all while maximizing profit margins and retaining clients. “we have a consistent flow of new clients and we no longer have to discount to get them to come in,” he says.
frank stitely, at skc cpas in chantilly, va., and a frequent contributor to 卡塔尔世界杯常规比赛时间, is being more careful, with only slight increases. “personal taxes, specifically, are a commodity, and, in general, compliance services are commoditizing,” he says, with his pricing driven my market forces. on the other hand, the firm bills “per form for personal returns and by proposal for almost everything else.”
brian roark in jenison, mich., likes to say integrity tax’s offices have been doing taxes “since dinosaurs roamed the earth.” but today he’s playing catch-up in the wage markets, pushing through moderate billing increases.
at southwest tax & accounting in elkhart, kan., owner terri ryman, ea and quickbooks proadvisor, is going for significant price increases as clients struggle with the affordable care act and repair regs. she says her business is growing every year. ryman is also a prominent member of the national society of accountants and the national association of tax professionals. read more →
as a matter of fact, for the past 12 years through surveys with the aicpa, we have been asking firms to share with us whether or not they have a succession plan in place.
when you consider the responses to this question from the pcps succession institute succession management surveys conducted in 2008 and 2012, clearly more and more firms are:
getting their act together,
documenting their succession management strategy and
thinking through the ramifications of retiring one or more senior owners.
here is the question we asked along with summary data from both surveys: read more →
undercharging – or lowballing as it’s also called – is the scourge of the profession. it has always been present, and unfortunately, it will probably be with us for the foreseeable future.
when partners plan to retire, how do we go about creating additional capacity or freeing up the necessary capacity to handle the client transitions that need to occur?
first, all of the “c” clients, which is our shorthand way of describing the smallest clients the firm serves – who while profitable, don’t have much opportunity to hire us for additional services – should not be transitioned to partners, but rather to managers. read more →
let’s assume you have a retiring partner. you have decided how to pay the partner for his/her value in the firm, you have pinned down the mandatory sale of ownership date (mso) so you can phase that partner out of his or her leadership role in the firm, and you have covered the single most abused part of the succession process, which is client transition. it is now time to discuss how to find replacements for the retiring senior partners.
the most commonly asked question on this topic is “how can we find people with the same technical skills, management ability, client service capacity and vision for the firm’s future as those who are leaving?” the simple answer is “you won’t, so stop looking for that exact combination.” read more →
for a small tax client, the directive could be as simple as a one-year transition and turning it over to whoever has been assigned to take over that account. for example, the action plan might be something like:
once a firm is ready to phase out a partner in retirement, it’s time to move on to the client transition process. but this is the single most abused part of the entire succession process.
the reason why this part of the process is the most abused is because both sides – the partner nearing mso (henceforth referred to as retiring partners or retired partners) and the remaining partners – are motivated to do the wrong things. for example, it is in the best interest of retiring partners to not transition their clients because if they don’t, the firm will need to keep them around to continue to work on them after mso. if this isn’t bad enough, because they did not transition their clients properly, the retired partners have a great deal of leverage since they are now entitled to their full retirement pay and still have control over some or most of their client base. this allows the retired partners to gain additional benefits from the partner group by basically reselling their clients to them again. unfortunately, this situation is more the norm than the exception. read more →
make sure you’re not growing your own competition.
if you don’t set policies and enforce retirement deals, your firm could become a financial hostage.
consider creating two classes of partners.
should you add a partner … or capacity? they’re not the same thing.
bonus checklist: 8 best uses for a retiring partner.