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Succession Planning

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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The Flawed Economics of Admitting New Partners

Originally published in AccountingToday, August 2018
If you have ever bought a practice off the street, you know you can't keep paying the seller their historical level of full-time compensation and pay for the practie purchase at the same time. Yet many internal purchase arrangements are set up under the same flawed economics.
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Five Ways to Beautify Your Firm for M&A

Originally published in AccountingToday, July 2018
It was not that long ago that it was a seller's marketplace in CPA firm mergers and acquisitions, but for most marketplaces in this country and especially for larger firms, it has become a buyer's marketplace. As a result, it has never been more important to make your firm more attractive to a successor firm.
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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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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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