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Principals of accounting firms are “sitting on their hands” when it comes to succession planning, often waiting until a significant health or lifestyle trigger before putting a structure in place.
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‘Too busy’ to plan: 80% of firms falter on succession
27 October 2017
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Citing the Business Fitness 2017 The Good, the Bad & the Ugly of the Australian Accounting Profession survey, Practice Ignition’s Trent McLaren said 79 per cent of firms did not have a documented succession plan in place despite the increasing average age of practitioners in the industry.
His comments follow previous warnings on many small accounting firms leaving it too late, and not considering appropriate levels of details in place.
Speaking at an Intuit Quickbooks event in Sydney, Mr McLaren, who joined Practice Ignition as global head of accounting and strategic partnerships in June, said he spoke to an accountant who had only decided to put a succession plan in place after suffering four heart attacks.
“So what happens when you leave today and that bus that you see is just a little bit quicker than you thought?” Mr McLaren said.
“If we're not thinking about what happens next in our business then what are we doing? We're just sitting on our hands going 'we're too busy'; we're always too busy but we need to think about what's next in the future.”
“The average age for a practitioner was 55 in the accounting industry so there's a lot of change coming in the next couple of years but with all that change, we still haven't actually started planning for it at all.”
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However, Mr McLaren was also quick to note that firms looking to acquire new fees could tap into this opportunity by speaking to firms who had yet to draft up succession plans.
“Sixty per cent of firms said that they were looking to acquire fees so if you're sitting here saying I'm part of the 58 per cent that wants to leave in 12 months’ time, look around because 60 per cent are probably looking for more fees to acquire,” said Mr McLaren.
“Have a chat to people around you, ‘what are you doing, what are your plans, oh you're leaving in 12 months’ time, what are you going to do with the rest of the business? Can I have that?’.”
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