Tips For a Successful Accounting Practice Transition

The sale or purchase of an accounting practice can be extremely successful with a good transition. To have a smooth and viable transition, both the buyer and seller need to be involved in the process. Without consideration of basic concepts and reasonable care, an accounting firm transition can cause issues right out of the gate. There are five basic concepts to consider in the transitioning process to complete a beneficial accounting sale and purchase.

Five Accounting Firm Transition Concepts

  1. Short Transitions Are Better for CPA Firms – There is a common misconception in the industry that a long transition period is better for client retention. It is understood that the seller has a relationship with their clients and this relationship cannot simply be “handed off” to a new owner. More often than not, long-term seller involvement hinders the buyer’s ability to nurture and develop a bond with clients. It’s very difficult to work in the shadow of the previous owner. Keep your transition period short and allow the new owner to build and grow a new relationship with the accounting firm’s client base.
  2. Develop a Transition Plan – Having a clear plan of action ahead of closing is incredibly helpful. No matter what time of year you buy or sell an accounting practice, the first month or so can be quite busy. Planning the transition prior to closing allows everyone to think without the pressure of the early demands of ownership. Develop a plan for staff involvement, client announcements and meetings, as well as operational concerns. There is a lot to do and maintaining a good perspective of what should take priority after closing is key.
  3. Ensure Open, Honest Client Communication – The firm’s clients should hear about the change of ownership directly from the seller and the buyer. This open and honest communication plays an important role in client retention. Life is full of changes and most individuals are accepting of that change when they are communicated with in advance. We always recommend a direct approach where the seller is clear about their future role with the practice. Accounting is a relationship business and the buyer should start the relationship on the right foot. Transitions should not be “masked” as a merger or new partnership when it is an outright purchase. This will leave a very bad impression on clients and make you less credible.
  4. Ensure Transparent Accounting Staff Communication – In any acquisition or merger, company staff is always on high alert. This is a big change for them and they need reassurance and empathy. Acknowledging the staff member’s concerns and providing clear answers helps greatly to reduce the fear and concerns of your new team. It is also important to allow staff plenty of time to get to know the new owners and ask them whatever questions they may have. Import staff are essential to the transition and success of the accounting practice. It’s natural for employees to have many questions related to the firm’s transition including:
    • Will I have a job?
    • Will my role or title change?
    • Will my pay structure change?
    • Will my hours be different? Holiday time, PTO, etc.?
    • Will I like the new owners?
  5. Making Sure It’s A Good Fit – Ultimately, the buyer and seller need to be a good fit for each other or the other four concepts above won’t make much difference. Make sure that personalities and philosophies match up fairly well. There is no such thing as a perfect fit and no two people will operate a practice in exactly the same way. However, if you are selling your practice, you need to be fairly certain that the buyer you have chosen will be well liked and respected by your clients and staff.

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About Brannon Poe:  Brannon is the founder of Poe Group Advisors and has been facilitating successful accounting practice transitions throughout the US and Canada since 2003. He is also the creator of Accounting Practice Academy. Brannon is the author of the Accounting Practice Insights Blog and hosts the Accountant’s Flight Plan” podcast with other top thought-leaders in the accounting profession. Brannon is an E&Y alumnus. He has worked with some of the most successful and seasoned CPAs in the industry and has been privy to the behind-the-scenes methods that these clients have used to build highly profitable practices along with capable and independent teams. Brannon has authored multiple books, including Accountant’s Flight Plan – Best Practices for Today’s Firms (published by both the AICPA and CPA Canada) and On Your Own: How to Start Your Own CPA Firm, Second Edition (published by the AICPA). Brannon is passionate about entrepreneurship and is the president-elect of EO Charleston (Entrepreneur’s Organization)

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