selling accounting practice during tax seasonAccountants know the busyness and stress that comes from tax season, those grueling months from January to April. No matter if you focus on auditing or taxes, you likely feel the stress and pressure that comes from the busiest time of year. And things will likely be drawn out even more in 2021, with the start of the tax filing season pushed back to mid-February.

This year, busy season could end up taking half the year.  Tax season can be overwhelming and a time when adding another item to your list seems impossible, but it’s also a time when some people find themselves trying to close an accounting practice sale.

The COVID-19 pandemic has also forced businesses to rethink their strategies and caused people to sell their practices sooner than expected. So even if you weren’t planning on selling your practice now or definitely not during busy season, you may find that other circumstances have changed your situation.

If you’re selling your accounting practice after tax season has begun, here are eight tips to survive the busy season and make the most of your sale.

Plan for a Smooth Transition

As you get your firm ready to sell, expect that the transition during such a busy time might be a little more chaotic than if it happened in another time of year. Create a plan for a smooth transition by working with the buyer to manage expectations.

Know what you want from the sale before you approach the buyer—do you want to step away by a certain date? Ensure that your employees are kept on? Maintain the vision for the firm? Use those ideas to discuss the transition with your broker and buyer so that it matches your goals and expectations.

However, it’s also important to realize that sometimes the best-laid plans go out the window, especially during tax season. Be willing to take a step back and make some concessions if it means the sale goes through more smoothly. A smooth transition might include phasing yourself out by switching to part-time work for some consistency during tax season.

It could also include bringing in temporary employees or starting the tax season earlier than normal to spread out the work.

Whatever your plan, be sure to work together with the buyer and communicate so that you are on the same page and can have a seamless transition. Creating your plan early in the sales process can make the transition much smoother for everyone involved.

Use an Experienced Broker

When things are busy at the firm, the last thing you want is to get bogged down with the details of the accounting practice sale. An experienced broker will act as your advocate and ensure you get the best deal possible, while also working through the many details of the sale.

The time it takes to find the right experienced broker for your sale will pay off with a much smoother transaction and an experienced advocate on your side. An experienced broker knows the right questions to ask, the best features of your firm to highlight and has a network of strong potential buyers and connections to help move your sale along. During the busy season, time is money, so anything that can make the process more efficient and smooth can have a big impact.

Take time at the beginning of the process to discuss your desires and plans with your broker so that they can best represent you. If they have a strong idea of your goals and plans for the firm, they will be able to find the right buyer.

Experienced brokers have sold firms during all seasons of the year, including tax season, so they know the extra stress that comes. That experience can pay off with great advice to close the sale as smoothly as possible without hurting your clients or employees.

They will work through the sale while you keep your firm running so that you can smoothly hand things over when the sale is finalized.

Have a Clear Communication Strategy

Throughout the sales process, try to be as transparent as possible. With numerous people and moving parts, it can be difficult to keep everyone informed. But as work gets busier, set time aside to create a thorough communication strategy.

 

Start by thinking about your shareholders and any business partners you may have. You’ll need to start by informing them that you are selling the firm. Create a plan to keep them updated and hear any suggestions or feedback they may have.

 

From there, you’ll need to create a plan for your employees. Depending on the size of your firm and the number of employees you have, you may want to designate one person as the spokesperson for all employees to act as the person who collects questions and comments and funnels them to you. Try to simplify the communications channels as much as possible so employees can clearly know what is going on and how it will affect them and so that they can provide feedback and ask questions. The last thing you want during tax season is employees getting frustrated or flustered because they don’t know what’s going on.

 

You’ll also need a communication plan for your clients. You likely don’t want to share information about the sale of the firm to your clients until the deal is officially finalized. But even before then, there is the real chance that word will get out and customers will want to know what is happening with the firm. Be transparent and authentic with customers. Share as much information as you can, including what the sale means for them. Customers will likely be concerned with their taxes being completed on time and what will happen to the employees and service at the firm. Prepare ahead of time with answers to their questions so you aren’t caught off guard or tell something different to various clients and cause confusion. You may also want to proactively supply information to your clients, which can also build trust and show transparency.

 

The key to your communication strategy is to prepare before you are bombarded with questions. Think of who you need to communicate with, what questions they may have, and what they need to know and then create a strategy that meets those needs as clearly as possible. 

Keep Quality Records

When you sell your accounting firm, the buyer can request to look through your past financial records to see how your business has grown and changed over time and to get an idea of your current financials, liabilities, and assets. It is crucial to keep accurate records, not only to make it easier for potential buyers and increase your chances of moving the sale along quickly, but also to avoid any legal and financial problems that may arise from records that are inaccurate or difficult to understand. During tax season, anything that slows down the sale of the firm can be costly. The investment in time and resources to clean up and organize your records can greatly pay off in the long run.

 

During the busy season, it is also crucial to maintain quality records of your current work. That includes taking copious notes on each client and clearly recording what you are doing for them and why. Selling a firm means there will be transition, and keeping quality records improves your chances of a smooth transition. Without good records, your employees or the new owner may have to call clients to get an update or have them repeat their situation and what services have been performed instead of being able to tell on their own. Records keep everyone on the same page and ensure there isn’t an interruption in the quality of work performed.

Minimize Long-Term Commitments

The sale of an accounting practice can be unpredictable, especially in the uncertain times we live in. Some sales happen quickly, and sometimes even high-quality firms take longer to sell. When an interested and qualified buyer comes along, you want to be able to move the process forward quickly without being bogged down by existing commitments.

As you prepare to sell your accounting practice, especially during tax season, try to minimize long-term commitments. This includes avoiding things like signing a long-term lease, hiring or committing to hire multiple employees, or endeavoring on a long-term marketing or sponsorship agreement. These commitments can be difficult to get out of later and can slow down the closing process or lower the value of your firm. Instead, try to stay within the current or next quarter with your plans while balancing predictability with fluidity.

Prepare Employees

Be open and transparent with your employees about the plans for the sale. Without clear communication, they could be caught off guard with changes during the busiest time of year.

During tax season, your employees are likely putting in long hours to deliver great service to your clients, and they deserve to be kept in the loop so they aren’t blindsided. Let them know how involved the new owner will be, when the sale is expected to take place, and if they are likely to have a job when the sale goes through. Keep them up to date as the process unfolds and if anything changes. Your employees might not be the people buying the firm, but they are one of your most valuable assets and should be included and treated well.

Have an open discussion about what it will take to be successful during the transition and provide them with the resources they need. Delegate your responsibilities to other employees and have someone be in charge as you are busy with details of the sale and eventually transition out of the firm. When employees are prepared and empowered, they will be ready to push through the changes and busyness and perform great work.

Focus on Clients

One of the biggest challenges of any accounting firm sale, but especially during tax season, is making sure the clients don’t suffer during the transition. No matter how chaotic things may seem behind the scenes, don’t let it impact the work you do for clients.

Try to set boundaries between all of the activities for selling the practice and serving your clients. That could mean only signing paperwork or discussing the sale at certain hours of the day or certain days of the week. When you are working with a client, give them your complete attention to best meet their needs instead of being distracted by the pending sale.

Take the time to focus on each individual and their needs. Work through their questions and issues without worrying about the other things that have to get done.

Don’t leave your clients high and dry if something comes up with the sale. Always put clients first and have a backup plan if something comes up for the sale that you can’t reschedule. Investing time in clients always pays off. Even if it makes things busier during tax season, having a strong base of loyal clients will be worth it in the long run.

Leverage Technology

Don’t feel you need to do everything on your own. Use technology to simplify and make your work more efficient. Automate data entry, use a virtual assistant to schedule meetings, or use a software program to populate clients’ tax forms.

Taking advantage of technology frees up employees to work on other projects and can help the transition to the new owner go more smoothly. Automation is always important in accounting firms, especially if you are looking to grow your client base or facing a surge in work, but it becomes even more crucial during the sale and transition of the firm.

By adopting technology at your firm, you have more time to spend interacting with clients, communicating with customers, and working with your broker and prospective buyers without sacrificing the quality of work and service that comes out of your firm.

It also frees up employees to work on the transition efforts instead of getting bogged down with the mundane, day-to-day work. If the idea of giving some tasks to technology seems overwhelming or intimidating, start with a single task, such as entering client information or sending appointment reminders.

Once you’ve implemented that technology efficiently, you can add another piece to cover another task until slowly but surely, you’ve built an automated and efficient accounting firm.

Contact a Broker

Knowing how to sell an accounting firm during tax season with these eight tips can help the entire sale process and transition run more smoothly. It may be the busiest time of year in the accounting world, but that doesn’t mean it can’t also be a good time to sell your practice.

For your sale and transition to be as seamless as possible, contact professional broker, ProHorizons, to learn how they can help.