Succession and retirement planning for the accounting profession has never been more important and at the same time as difficult as it is at present said Connect Financial Service Brokers (Connect) CEO Paul Tynan. Baby boomer generation accountants have been putting off their exit aspirations and plans as they wait for that perfect moment and ideal offer to reward them for their years of commercial endeavour – that for a rapidly growing number will never arrive.
Unable to find a buyer, many public practice accountants will simply switch off the lights and walk away from the accounting practice into an uncertain and underfunded retirement future.
The accounting industry is currently experiencing unprecedented change as technology continues to break the rules of past business models, create new practice structures, services and change the way accountants engage with their clients said Paul Tynan.
“Baby Boomer accounting practice owners continue to get older and it’s important that their lifetime of work is seamlessly passed onto a new generation, however the X and Y generations are not as keen to embrace ownership as past generations of accounting business owners have” said Paul Tynan.
“We are seeing fewer X and Y generation members wanting to move into business ownership for one main reason. This generation is burdened with debt! They have school fees, lifestyle expenses, house loan repayments, marriage costs, children to fund and as a result have no money left for business debt!”
After young people finish their education they are looking for a stress free employment situation as their first focus is to reduce their mounting debt.
In this environment, many mature age public practice accountants are wondering how to execute their individual plans that today are very different to the practices of the past.
Paul Tynan continued, “Previously a public practice accountant’s succession plan would be to invite the loyal younger staff member to be partner. However as mentioned previously, today’s young accountant is very reluctant to take on the burden of additional debt and related accompanying stress”.
Competition is a further headwind faced by the accounting industry with challenges coming from a myriad of directions. The normal boundaries of the profession are being broken down and past conventions and revenue streams tested by new professionals and advances in technology.
Public practice accountants, especially the Baby Boomers, are turning to their professional associations for assistance and guidance with the organisations responding through seminars, workshops, increased resources and access to M & A specialists.
“Small business, farmers, professionals and tradesmen see accountants as their ‘trusted adviser’ and that mantle and accompanying responsibilities gets bigger as you move into country areas. Accountants hold a very powerful position in the eyes of their clients however far too many are unable to capitalise on this opportunity and their response is like a frozen rabbit caught in the headlights of a car when it comes to change”.
“Fortunately there are accountants that are adapting quickly to the new era and moving to a more proactive way of doing business – far different from the traditional ‘reactive’ practices of the past. These businesses are thriving in the new world and act as a beacon attracting graduates, quality staff and clients, commercial growth opportunities and potential investors and buyers”, concluded Paul Tynan.
