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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.
Would you abandon your kids this way?
By Meg Killian, PICPA's Vice President of Member Relations
Every so often, I get a call from someone whose loved one recently passed away, leaving behind an accounting practice and the caller doesn’t know what to do. Clients are calling, vendors are calling, and creditors are calling. Nobody prepared for this, and the deceased owner didn’t leave any instructions. Sometimes the loved one doesn’t even have the password to log into the business computer (Side note: my husband and I know where to find each other’s account passwords should we ever need them. In my opinion, a good practice for all couples nowadays.)
Sadly, this is not surprising. Studies show that only 19 percent of sole practitioners have written succession plans.
You worked hard to expand your expertise, build your practice, gain the trust of your clients, and create a livelihood. You probably don’t want to leave it all to chance or wait until retirement is on your door step before addressing what should happen to your business. Since 65 percent of sole proprietors are older than 60 then I suspect that many of you are running a bit late in this area.
In the case of multi-owner firms, only 46 percent have a written succession plan. Maybe you think the other guy will take care of it? Or you’re waiting for younger staff to step up. But have you groomed any of them as a successor? Are you just assuming being partner is what they want? A colleague of mine recently had a conversation with the managing partner of a regional firm who said his staff has no idea how much money he makes nor do they seem to recognize the other benefits of being a partner in a larger firm. Is the lament, however, an indication that the partner (and many others for that matter) does not recognize what is important to that group?
Maybe work/life balance is more important to the next generation than making a lot of money or having a title. They may not want to have to prove themselves worthy of leadership in same way the current and previous partners did. It may be time to look at succession grooming in larger firms in a new way. Or maybe Generation X is just living up to its slacker status? I don’t know, but either way the reality is you’re not going to work forever and if you want your firm to live on when you’ve moved on then some planning is necessary.
This is a critical professional issue and the PICPA has put together a web page that contains a compilation of succession planning information and services. I encourage you to check it out. This page is still developing, so new items will continue to be added. And if you have any ideas or services that you think PICPA should consider in this area, I’d love to hear about them!
I’d also like to know what you are doing to prepare your firm or your staff for your departure, however or whenever that may be. Feel free to comment with your feedback below.
Every so often, I get a call from someone whose loved one recently passed away, leaving behind an accounting practice and the caller doesn’t know what to do. Clients are calling, vendors are calling, and creditors are calling. Nobody prepared for this, and the deceased owner didn’t leave any instructions. Sometimes the loved one doesn’t even have the password to log into the business computer (Side note: my husband and I know where to find each other’s account passwords should we ever need them. In my opinion, a good practice for all couples nowadays.)
Sadly, this is not surprising. Studies show that only 19 percent of sole practitioners have written succession plans.
You worked hard to expand your expertise, build your practice, gain the trust of your clients, and create a livelihood. You probably don’t want to leave it all to chance or wait until retirement is on your door step before addressing what should happen to your business. Since 65 percent of sole proprietors are older than 60 then I suspect that many of you are running a bit late in this area.
In the case of multi-owner firms, only 46 percent have a written succession plan. Maybe you think the other guy will take care of it? Or you’re waiting for younger staff to step up. But have you groomed any of them as a successor? Are you just assuming being partner is what they want? A colleague of mine recently had a conversation with the managing partner of a regional firm who said his staff has no idea how much money he makes nor do they seem to recognize the other benefits of being a partner in a larger firm. Is the lament, however, an indication that the partner (and many others for that matter) does not recognize what is important to that group?
Maybe work/life balance is more important to the next generation than making a lot of money or having a title. They may not want to have to prove themselves worthy of leadership in same way the current and previous partners did. It may be time to look at succession grooming in larger firms in a new way. Or maybe Generation X is just living up to its slacker status? I don’t know, but either way the reality is you’re not going to work forever and if you want your firm to live on when you’ve moved on then some planning is necessary.
This is a critical professional issue and the PICPA has put together a web page that contains a compilation of succession planning information and services. I encourage you to check it out. This page is still developing, so new items will continue to be added. And if you have any ideas or services that you think PICPA should consider in this area, I’d love to hear about them!
I’d also like to know what you are doing to prepare your firm or your staff for your departure, however or whenever that may be. Feel free to comment with your feedback below.
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