Retiring accountant?

Retiring accountant?

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I came across this website the other day: http://retiringaccountant.co.uk/ for accountants looking to sell their practice or merge or buy new ones. It also offers a free valuation service.

I'm really interested in getting members' views on this: Would you put your practice on a website like this? How useful a tool do you think it is? Also, are you worried about succession? 

Replies (16)

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By Henry Osadzinski
26th Nov 2012 11:53

Thought I'd add

We have a similar service in our Opportunities area but I haven't seen anyone using it specifically to pass on their practice when retiring. It'd definitely be interesting to hear people's thoughts.

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By ShirleyM
26th Nov 2012 12:15

It is something I keep thinking about

... and it fills me with dread.

We hear so many stories of buyers and sellers being ripped off and clients running for the hills because the 'new' accountant immediately raises the fees by a large amount.

When I retire, my first priority will be my employee, and my clients. I hate to let people down, and I would want the new accountant to be someone who will 'fit'.

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By [email protected]
27th Nov 2012 10:49

It is somthing I have thought about

 I think it is best for am employee buyout if it is at all possible as the clients know the staff and trust them and it is way of helping people who have helpd you.

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By pauljohnston
27th Nov 2012 10:50

ShirleyM

Nicely put.

This will be a common theme and if I was buying I would want to purchase from an accountant that cared because I suspect greater client retention.

So often I hear the statement " our accountant retired and the new firm just put up the fees but the care and attention just was not there".

 

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Della Hudson FCA
By Della Hudson
27th Nov 2012 11:27

Potential buyer

As someone who is looking to buy a fee block I think it is much better to have an organised handover to someone you trust (however you first meet them, online or not) than to let your clients drift away because you are no longer providing the service they require.

I have picked up clients from different "semi retired" accountants because of perceived poor service which, in one case, boiled down to the fact that the accountant was hard of hearing so communication was difficult. Another source of new clients is when they are abandoned as the result of an accountant who has died "with his boots on" as it were, so handover is impossible.

If the retiring accountant has been doing a professional job for a professional fee then there should be no need to increase fees following a buyout. I suspect that many don't bother to maintain fees in line with inflation in their retiring years.

Consider selling out to the right person so that your clients have the service they need. Personally there are times when I'd love to retain a good consultant who knew at least some of my clients.

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7om
By Tom 7000
27th Nov 2012 11:37

Selling clients

I am overstaffed by 2.5%

I have access to spare office space, for extra staff

...and a  large spare pile of cash...Anyone want to swop it for their clients, go sit on a carribean island ... and side step the January rush???.

 

if so [email protected]

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7om
By Tom 7000
27th Nov 2012 11:49

Their website

I had a look it appears firms are worth 2x turnover for example

Seller Ref : 294
Large Yorkshire Based Accountancy Firm – For Sale Leeds / York / Sheffield area – Price: Offers Over £3,600,000 TURNOVER: £1,800,000, CLIENT BANK: 1,250+ Clients, PARTNERS: 10 Partners 

 

Mind you I cant see how you need 10 partners to run that, Ive got 1530 clients and Im a sole trader...I suppose well they might all be really big audits....and if all 10 partners leave and retire I wonder what effect taht would have

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By N.Draper
27th Nov 2012 13:18

Get Professional Advice

I run a brokerage called Draper Hinks www.draperhinks.co.uk.  We put buyers and sellers of accountancy fees together.  I tell all vendors that if they do not like the buyer and feel they could not work with them, then the deal will not work.  If the vendor does not like the buyer, chances are the staff won't and the clients won't.  So the attrition rate will be high.  The best deals are always those where there is a good personality fit.  Other factors such as income multiples, payment periods, clawback etc etc are secondary considerations.  Get the fundamentals right and you have the basis for a good deal that will work for both sides.

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7om
By Tom 7000
27th Nov 2012 14:04

How about

Cash in advance...no clawbacks...reckon that works for a vendor...

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By N.Draper
27th Nov 2012 14:15

Cash in advance

Done deals through Draper Hinks with cash in advance and no clawbacks.  It can be done.

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By R E Robinson
27th Nov 2012 16:55

Online sales

Not too sure about a sale online, most accountants that I know care a great deal about their clients and their staff , so an organised and proper handover is essential. Also , a large part of the due diligence that SHOULD be carried out for such a transaction should be to carefully examine the culture and mindset of both parties. I have been involved in the North West with a number of sales, mergers, acquisitions etc, so far none have yet ' gone wrong ' . Careful planning and Due Diligence are the key words

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By paul799
28th Nov 2012 08:59

IMHO

I agree that the fit is what matters. Just look at which clients tend to stay with you - usually people (who) like you - so any new accountant has to fit. I would suggest that you talk to some of the local practices, if you get on maybe you can do a deal and if not run away. I have always been looking for acquisitions so always try to foster relations with other local sole practices. This tends to be a smaller deal when it comes off but thats fine less problem integrating. Allegedly there is a demographic with lots of sole practices getting older but traditional retirement is going to become less common. Why don't you pass on the larger/complex to somone else and retain the smaller stuff to keep you off the golf course?!

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By Rachael White
28th Nov 2012 12:32

Some very interesting viewpoints here. 

What tips would any of you give on succession?

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By N.Draper
28th Nov 2012 14:16

Getting the fit right

I once met a buyer who only expected to retain 30% of the fees bought, through poor management, little or no hand over and an ego that could fill a room.  Synergy is what you need to look for.  As to succession, internal succession is the best way to minimise attrition and maximise retention.

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Replying to Carl London:
Red Leader
By Red Leader
28th Nov 2012 15:50

small blocks

As a vendor, parcel up your fees into small blocks of say £50k. You'll probably get a better price and better terms and conditions.

I realise that this would be unworkable for Big Tom but I think it would work for the rest of us. Maybe Tom would use blocks of £500k.

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7om
By Tom 7000
29th Nov 2012 08:31

@red leader

Thats a good idea

 

If you drop your fees into a big practice they will just get swallowed and mixed in with the rest. Unless a manager is apointed to go and see them all, its unlikely more than 2 or 3 of the largest ones will be seen, we all have our cut off point at which you see an acquired client...which fee level £50...£250...£1000...£5000

Do you put all the really bad onerous ones with small fees together and flog em to the bloke down the road you have never liked and all the good ones go to your mate....You could have some fun doing parcels...And theres not enough fun in accounting...no there is.... its actuaries where theres no fun

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