Is Your Firm Prepared for Succession?

August 24, 2017

Succession planning once again ranks among the top issues for CPA firms according to the latest PCPS CPA Firm Top Issues Survey. It is not surprising with over 40 percent of firm owners planning to retire over the next four to five years.

Here’s the big question. Where is your practice with its succession planning? 

        We currently have a written, approved succession plan in place (multi-owner firms)
                44%  Yes 
                56%  No

        I currently have a practice continuation agreement with another firm (sole proprietors)
                7% Yes    
                93% No

Start the Conversation
If you have not begun the conversation around the succession of your practice, now is a good time start. Questions to kick off the dialogue include:

  • When do you plan to retire?
  • What will happen to your practice when you retire?
  • What will happen to your clients?
  • What will happen to your employees?
  • Are there others in the firm who could take over the practice when the time is right?
  • Are these practitioners willing and prepared to take on the leadership role?

Develop and Implement a Formal Plan
No matter the size of your firm, it is important to develop and implement a formal succession plan. The complexity of your plan will depend on the size and structure of your practice and how you intend to move forward. Key issues to address include:

  • Timing
  • Transitioning leadership
  • Selling or merging the practice
  • Valuing the practice
  • Grooming the next generation of leaders
  • Transitioning clients
  • Arranging buyout details
  • Closing the practice

Yes, this can be a daunting task, one that is easy to put off due to a lack of time and knowhow. Did you know PCPS has an extensive array of succession planning resources you can put to work right away in your firm? As a member of PCPS these resources are free of charge.