Succession Planning

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How to Select a Successor

Originally published in Journal of Accountancy, September 2013
Selecting the successor for a retiring partner in an accounting firm can take on many forms. The decision can be made by an individual CPA or by the firm leadership. It can involve the transfer of clients, ownership, and/or responsibilities internally or the sale of ownership to an outside entity. Regardless of the scenario, a number of factors should be considered in evaluating the potential successors for a retiring partner.
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How to admit new partners: A fresh approach

Originally published in Journal of Accountancy December 2015
The AAV method can help accounting firms find the right formula for bringing in new owners on terms everyone can live with.
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Roadblocks to Avoid in Accounting Firm M&A

Originally published in the Journal of Accountancy, September 2015
Whether you are buying or selling, these tips can help you navigate the potential pitfalls on the road to closing the deal.
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Exit Strategies for Owners of CPA Firms

Originally published in the Pennsylvania CPA Journal, Summer 2015
If you are an owner of a small- to medium-sized CPA firm, the demographics say you are going to reach normal retirement age within the next 10 years. If you don't personally fall into that group, and you have partners, there is a good chance at least one of them will be retiring at some point over the next decade.
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How to Price an Owner's Interest in a CPA Firm

Originally published in the Journal of Accountancy, December 2014
Dramatically different demographic and market conditions require new strategies to pay for buyouts.
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The Culture Test

Originally published in Journal of Accountancy, May 2014
There are many types of succession deals and strategies, each with its own advantages and challenges. In the case of a merger or acquisition facilitating succession, the No. 1 key - and threat - to success is easily identified but not so easily defined. The authors have asked hundreds of managing partners over the years what makes a merger successful. "Culture" is by far the most popular answer.
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How to Select a Successor

Originally published in Journal of Accountancy, September 2013
Selecting the successor for a retiring partner in an accounting firm can take on many forms. The decision can be made by an individual CPA or by the firm leadership. It can involve the transfer of clients, ownership, and/or responsibilities internally or the sale of ownership to an outside entity. Regardless of the scenario, a number of factors should be considered in evaluating the potential successors for a retiring partner.
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Succession Planning: Weathering the Perfect Storm

Originally published in Progressive Accountant, September 2013
One of the most frequent questions practitioners ask with regard to succession planning is the basic premise of "when should I start?" Succession planning ideally begins the day the firm opens its doors for business. But seldom, if ever, is that proactive strategy deployed.
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Succession Planning: What's the Future of Your Firm?

Originally published in Connecticut CPA, May/June 2013
For most CPA practitioners, succession planning is something that can never be addressed too early. In too many cases, those without any type of succession strategy are forced into hastily arranged mergers (where client retention suffers) or may even have to shut their doors for good.
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Succession Planning: Key Questions for CPA Firm Partners to Ask Now

Originally published in Washington CPA, May/June 2012
Every practice, large or small, has one common issue. What does the firm look like when the current owners are no longer active in the practice? For most practitioners, it is never too early to think about succession planning. The ultimate goal of the plan is to transition client relationships to an internal successor or outside firm, and monetize the value of the book of business.
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CPA Firm Mergers: Is It a Buyers' or Sellers' Marketplace?

Originally published in AccountingToday.com April 19, 2012
Like most scenarios that include a buyer and a seller, the marketability of CPA firms adheres to the eternal law of supply and demand. The demand for a practice is heavily based on the size of a firm (in gross revenues) and the location. Depending on demographics and geography, some areas of the U.S. are definitely skewed toward the buyer, while others favor the seller.
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Planning and Paying for Partner Retirement

Originally published in Journal of Accountancy by the AICPA April 2012
John was one of three founding partners in a firm formed 35 years ago. He oversaw the buyout of the other two founding partners and, as managing partner, groomed three young managers as his successors. However, when the time came for these managers to be admitted as partners, two of them declined, citing their reluctance to take on John’s buyout. What went wrong?
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CPA Firm Leadership: Communication Drives New Possibilities

Whitepaper issued by CPA Consultants’ Alliance, 2012 - Terrence Putney, CEO, Transition Advisors and CPA Consultants’ Alliance member was a contributor to this whitepaper
For CPA firm leaders to ensure that their firms remain independent and perpetuate well into the future, they will have to create work environments that attract, develop, inspire and retain the top talent in the profession.
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Considering an Acquisition

Originally published in Professional's Corner CCHGroup.com/Partners Spring 2011
After the death of his partner in Hevia Beagles & Co., Dan Hevia continued the practice as sole owner. As time passed, the St. Petersburg, Fla., CPA found that running a six-person firm on his own was daunting. It wasn’t just the burden of carrying all decision-making responsibility. Hevia had no one to share the cost of long-term investments in equipment, marketing and training — investments he needed to keep the firm healthy until his planned retirement, still nearly a decade away. Besides, how could he plan that retirement with no partners to succeed him?
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Making The Transition-Has Your Firm Got What It Takes For a Successful Succession?

Originally published in The Practicing CPA, February/March 2011(The Newsletter of the AICPA Private Companies Practice Section)
With the aging of the baby boomers, succession is on the radar screen for most accounting firms. According to the PCPS 2008 Succession Survey, 63% of multipartner firms expected at least one partner to retire within five years, with over half saying more than one partner will retire. A total of 65% of the sole owners were more than 55 years old. The majority of these firms hope to transition their clients and ownership internally to other partners or experienced staff members. But how do you know whether that transition will work or whether it will be necessary to take on new outside partners or turn to another firm for a merger or similar arrangement?
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Who Would Run Your Firm? Practice Continuation Agreements Help Plan For the Worst.

Originally published in the Journal of Accountancy by the AICPA February 2011
There comes a time when every sole practitioner or small firm owner needs to consider the consequences of a disruption in leadership of his or her CPA practice. Illness, disability, family obligation or death can be devastating for the CPA’s clients, family and employees. Proper planning, however, can mitigate the consequences.
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Succession Planning: What Are the Roadblocks in Most Mergers? Is Anything "Easy"?

Originally published in the June 2010 CPA Practice Managment Forum, a monthly journal published by CCH, a Wolters Kluwer business. After being involved with hundreds of mergers and acquisitions of accounting firms over the past 20 years, we have found a trend: the bumps in the road are the same whether the mergers are between firms of equals or a smaller firm is merging into a larger one. Conversely, some surprising things are not as hard to overcome as one might think.
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Succession Planning--Valuing Partner Equity in Larger Firms

Originally published in the CPA Practice Management Forum, December 2009, Succession planning is the foundation that creates a successful transition of client relationships. This article discusses how to capture and measure the value of the firm when buying out retirement minded partners.
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Succession Planning: The Available Strategies and How They work

Originally published in the CPA PRACTICE MANAGEMENT FORUM, a monthly journal published by CCH, a Wolters Kluwer business, October 2009.
With the aging of the Baby Boomers, succession planning remains an integral part of looking to the future. This article discusses how to manage partner transition within the firm and how to determine if you have what it takes to execute an internal succession plan as well as options if you cannot.
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Replacing Retiring Partners

Originally published in The CPA Journal, October 2009
The gap between accounting firm owners’ need for successors and the available pool of partner-level talent will continue to widen due to demographic changes as baby boomers age and retire to be replaced by a smaller cohort. This is probably the single most important long-term issue facing small and medium-sized firms. This article walks you through the considerations in addressing retirement minded partners.
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The Value of a Smooth Transition in Tough Times

Originally published in the AICPA SMALL FIRM SOLUTIONS, Spring 2009.
During a time of economic uncertainty, both buyers and sellers will be giving extra scrutiny to all aspects of a merger or acquisition. A key measure of a deal’s success is the percentage of clients retained afterwards. To plan for the highest level of retention possible, start by understanding you are your clients most trusted business adviser and this trust can be taken advantage of, in a professional and ethical way, and should not be feared. Here are some retention strategies.
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Succession Planning for the Sole Practitioner

Originally published in the AICPA SMALL FIRM SOLUTIONS, Winter 2008. Effectively transitioning your client relationships to a successor firm should also maximize the value of your practice.
How do you choose a successor? How do we retain these partner loyal clients?
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Current Trends Surrounding M & A of Accounting Firms

Reprinted with permission from Inside Public Accounting December 2007
A look at how the market is changing and why to start planning succession earlier then in the past. This article takes a long look at where the market place was at this time but valuable lessons included within this article remain relevant today.
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Mergers of Accounting Practices

Originally published in Today’s CPA November/December 2007
Mergers remain an area of extreme interest for many public accounting firms. Should your firm be considering a merger? If you are already pursuing mergers, how can you be better prepared to be successful? This article will provide you with an overview of the rationale for mergers of accounting firms and some key points to keep in mind as you pursue this strategy for your firm.
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If the Shoe Fits

Originally published in Insight, the magazine of the Illinois CPA Society August 2007
For some years now, PCAs or Practice Continuation Agreements have been recommended as a way for small accounting firms to insure against sudden, unforeseen calamities. That said, very few firms have this type of agreement in place. And those that do have found the results somewhat inadequate. How they work, who should have them...
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Succession Planning: Where Do You Stand?

Originally published in the AICPA SMALL FIRM SOLUTIONS, Summer 2007
Most small firms and sole practitioners do not have an internal succession solutions. The market is changing and the amount of firms considering succession over the next several years shall be building geometrically. When should you commence your Succession Plan?
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Unique Approaches to Succession Planning for Accounting Practices

Originally published in Leaders Edge, the Michigan State Society of CPAs March/April 2007
An overview of the varying considerations in planning for an internal or external succession. This includes the timing as to commencing your succession plan, valuing your firm, choosing a successor and some transition tips.
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Succession Planning

Originally publishes in Florida CPA Today Nov/Dec 2006
You have devoted years to building your practice. With proper planning, you can maximize the value of your firm through a sale where everyone wins: you, your clients and the successor firm.
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M&A Foretold

Reprinted courtesy of INSIGHT Magazine, the magazine of the Illinois CPA Society, August 2006
Mergers and acquisitions in recent years have hit unprecedented levels. But what are the reasons behind the M & A explosion, and what will the market look like in the near future? The need for succession security, client growth and staff talent continues to drive the desire for mergers and acquisitions.
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Mergers and Acquisitions
The Questions You Need to Ask - The Answers You Need to Know...

Reprinted with permission from the NATP TAXPRO Quarterly Journal Spring 2006
Lately there’s been a tremendous amount of news about the buying and selling of accounting and tax practices. Regardless of your intentions it's important to examine valuation techniques and market evaluations. Here’s some M & A Q & A’s to consider.
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Two-Stage Deals

Originally published in the Journal of Accountancy by the AICPA March 2006Most accounting owners understand it takes time to properly transition their loyal client base to a successor firm. Regardless of this fact, most delay as long as possible creating a succession plan. The Two Stage deal enables partners in all size firms to maintain reasonable autonomy, control and income while commencing a transition plan. At last an answer is found!View Article

There's Still Time!

Reprinted with permission from Accounting Today Vol. 20 No. 2 Jan 30-Feb. 12 2006
Now may be the best time to sell – but it won’t always be a seller’s market. This article from early 2006 correctly predicts changes we now can look back and see have occurred and still are.
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Roles Of Partners, Equity And Compensation Stand Among The Top Considerations When Mergers Serve As Succession Solution

Reprinted with permission from Inside Public Accounting November 2005
Succession planning is one of the most urgent issues facing accounting firms today. While firms often look for internal solutions to succession, mergers and acquisitions are alternative solutions. This article is a reprint of an interview with questions and answers regarding M & A.
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Succession Planning for Tax and Accounting Practices

Originally published in the EAJournal July-August 2005
As tax and accounting professionals, we advise and help our clients plan years before they retire or sell their businesses. Yet so many of us fail to take our own advice and wait too long to start the process of succession planning.
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Succession Planning the Future is Now

Reprinted with permission from MACPA March 2005
You have devoted years to building a practice. With proper planning, you can maximize the value of this asset through a sale where everyone wins: the successor firm, your clients, and you.
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Succession Planning for Smaller Firms

Originally published in the Sum News by the Massachusetts Society of CPAs Summer 2004
When do I start the process? While we are constantly reminding our clients to plan for their retirement in advance, we frequently delay making our own succession plans. There are several key items that will dictate when to start the transition process.
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Hourglass Effect

Originally published in Insight, the magazine of the Illinois CPA Society August 2004
With labor shortages looming, internal succession planning couldn't have come at a better time. Is your practice ready for internal succession? View Article

The Key to Successful Succession Planning

Originally published by TAXPRO Quarterly Journal Spring 2003
As tax professionals, we provide the guidance our clients need to plan for retirement. As in the old story "The Elves and the Shoemaker," it is amazing how often we neglect ourselves and fail to plan appropriately for our largest intangible asset, our practice.
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Six Steps to Selling Your Practice

Originally published by TAXPRO Quarterly Journal Spring 2002
You worked long and hard. Finally, it's over. Another tax season is behind you. Like many of your colleagues, you're probably wondering what comes next...the following steps to selling your business should apply to almost all practices and hopefully supply you with more than just a starting point.
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