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Going into partnership. Pros and cons

I have been subcontracting to an accountancy practice and they have asked me to go into partnership

I have been subcontracting to a bookkeeping practice to gain experience and at the same time trying to build my own accountancy practice (I am a qualified accountant). I have now been asked to go into partnership with the bookkeeping practice. They are a well established practice in the area with many clients focussed on bookkeeping and payroll services. They are hoping that together we can grow the practice. They will be able to offer an added layer of services with my skills and I also have the skills to move businesses over to cloud accounting. Should I go into this rather than continue to build my own practice? Does anyone have experience of partnership arrangements they could share?

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By mrme89
07th Dec 2017 20:39

Don’t do it.

You’ll get to a stage where you realise that you are doing the more lucrative work and despite them working hard, you’ll see them as replaceable.

It will end in tears.

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07th Dec 2017 21:48

I agree with @mrme99.

Far better you go it alone and agree to refer work to/from each other (informally).

Your work has more value, plus as you grow and take on staff you'll be happy to do an element of the bookkeeping work yourself.

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07th Dec 2017 22:04

I've seen it happen too. It didn't work. You will get bogged down in managing the delivery of low paid work, while they see you as an opportunity to raise their rate.

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By Slim
08th Dec 2017 08:06

Firstly it all depends on the deal.

It would give great access to many clients immediately.

On the referrals, without fees doesn’t seem like a fair deal.

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08th Dec 2017 13:47

General rule, avoid bookkeeping and payroll as its crap work and crap fees.

Build up the accountancy practice and sub them the low fee bookkeeping work when you get busy.

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By birdman
19th Dec 2017 10:35

Yes but.....with MTD snapping at our heels, bookkeeping's going to be more "in demand" and many clients won't want anything more. It may be lower-paid but might become a case of better than nothing. As long as your value is reflected in the Partnership % might be worth considering?

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19th Dec 2017 11:28

Regardless of b/k versus tax work, etc, the more fundamental point is DO YOU LIKE COMPROMISE? You'll have to compromise with your partner/s whoever they are. As a sole practitioner, you are the boss.

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19th Dec 2017 12:19

If you are going to join a partnership join a firm of ACCA or ACAs - you are underselling yourself

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By JWB
21st Dec 2017 11:07

Interesting question, It really depends on what they are offering and if this is the direction you want to be taking. But don't sell yourself short, 50/50 partnership - make good money from whatever you do!

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21st Dec 2017 12:03

You can have a more formal and documented relationship without merging, such as an exclusive referrals agreement or acting as a consultant to their firm - they can put your name on their letterhead/promo material for kudos. You get the plusses without the minuses.

You want to avoid being responsible for their earnings and disputes on how to cut the cake.

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