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'Drill down' to protect your firm, accountants told

Principals of accounting practices have been encouraged to “drill down on the detail” and start conversations early when it comes to their succession plan.

Professional Development Lara Bullock 20 February 2017
— 1 minute read

Talking to Accountants Daily, JNP Capital director Jason Phillips said that principals of accounting practices are failing to sufficiently plan their exit from the industry.


“They don’t just need to have a succession plan –  that's a good start, but they actually need to drill down on the detail of what their preferred options are,” Mr Phillips said.

“Do they wish to sell to staff members, do they wish to sell to the open market, or do they wish to sell to a friendly competitor down the road which might involve a merger type arrangement?”

Mr Phillips said that it’s important to decide on this early to ensure they achieve maximum benefit from the eventual sale.

“All those things require different strategies to maximise not only the price, but also about client retention and what the relationship will be going forward with their clients and the principal that's exiting the business etc,” he said.

“All these things need to be taken into consideration and very few people, in my opinion, really put a strategic view on what's their best option, what's their preferred option, how are they going to execute that.”

Mr Phillips said it’s also necessary to talk go beyond the high-level conversations and ensure everyone is on the same page.

“So while they might have a succession plan which might involve selling in five years' time or might involve selling down to staff in five years' time, my advice would be it needs to go beyond that,” he said

“If your preference is to sell down to an existing staff member, what a lot of accountants do is they don't generally have the really deep, necessary discussions early on. All the conversations in my experience happen too little too late.”

'Drill down' to protect your firm, accountants told
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