and two considerations for the working partners.
by marc rosenberg
retirements & buyouts
the vast majority of firms pay retirement benefits over a 10-year period. we occasionally see five to seven years at lower payout levels.
some firms under $10 million adopt five-year payouts for goodwill, reasoning that because five-year payouts are common for the purchase of a cpa firm, the same term should apply to their own buyouts.
how firms decide the capital payable to a retiring partner.
by marc rosenberg
retirements & buyouts
we know there are two parts to retirement benefits:
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the issues involved in determining the capital are very few and straightforward compared with the goodwill determination, which is far more intricate and nuanced.
in fact, there are four main variables in calculating the capital. this compares to 25 variables for goodwill. read more →
forget “one times fees” for goodwill.
by marc rosenberg
retirements & buyouts
one of the first and most critical decisions in creating a partner retirement plan is the overall valuation of the firm.
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the value of a cpa firm has two components: read more →
plus: making the math work.
by marc rosenberg
retirements & buyouts
why are cpa firms deficient at succession planning?
it is abundantly clear that cpa firms have succession planning challenges. partners overwhelmingly prefer the exit strategy of passing on the firm to younger partners vs. merging out of existence. but history shows that the vast majority fail at moving their firms into the next generation. what holds them back?
the answer lies in the classic pogo cartoon line: “we’ve seen the enemy and the enemy is us.” read more →
valuing a cpa firm for partner retirement purposes is much different than a valuation for merger purposes.
by marc rosenberg
retirements & buyouts
profitable, attractive firms, generally under $2 million, sold in a market with many potential buyers, will often fetch 110 percent to 150 percent of fees.
if this is the case, why do cpa firms value goodwill for retirement purposes at no more than 100 percent of fees and usually, 80 or 90 percent of fees? here are six good reasons why:
9 factors that ensure retirement plans will pay off.
by marc rosenberg
retirements & buyouts
when a partner group crafts their firm’s partner retirement plan, they are hopeful that the plan will play an important role in their financial futures. they are guardedly optimistic that their buyouts will be realized.
but the path toward the retirement payday is a perilous one. many actions are necessary and a number of obstacles must be overcome for a firm’s partner retirement plan to pay off. read more →
top trends: flexible staffing, retention challenges.
accounting and finance professionals can expect starting salaries to rise an average of 3.5 percent in the coming year, according to a study from a leading staffing services company.
creative and marketing professionals are on the same pace, while information technology workers lead the work force gains at an anticipated 5.7 percent overall increase. overall, u.s. starting salaries for professional occupations are projected to increase an average of 3.8 percent next year. read more →
1 in 6 firms have no formal, written exit plans in place.
by marc rosenberg
retirements & buyouts
despite the clear, substantial value of a cpa firm, roughly 15% of multi-owner cpa firms – mostly firms with up to four partners – do not have a formal, written partner retirement plan. why? read more →
do it wrong and your firm could lose a pile of money.
by marc rosenberg
retirements & buyouts
partners have a natural tendency to view the firm’s partner retirement plan as a personal savings plan, but that’s not how these plans work. cpa firm retirement plans are quite different. read more →
apparently, they’re worth it.
by marc rosenberg
retirements & buyouts
an ample supply of willing buyers is a critical factor that strengthens and confirms the value of any asset, let alone a cpa firm. virtually every firm, from sole practitioners to the top 100, is eager to acquire a smaller firm. why is this? read more →
look at the revenue stream. goodwill is another story.
by marc rosenberg
retirements & buyouts
to illustrate a cpa firm’s value, let’s use an example of a plain-vanilla or average firm:
now, let’s compute the value.
developing successful strategies for changing expectations.
by marc rosenberg
cpa firm retirements & buyouts
the concept of retirement for cpas is rather amusing.
younger partners (say, under 40) insist with unshakable confidence that the oldest they will ever work is 50 or 55. they have other things to do with their lives (own another business, do charity work, pursue hobbies, etc.) besides working at a cpa firm and they want to pursue these interests while still young.
older partners (say, over 55) see themselves working indefinitely, with 65 being the earliest age that they will even consider retiring. read more →
the u.s. tax, accounting and bookkeeping industry remains a bright spot in the nation’s economy, according to 卡塔尔世界杯常规比赛时间 sources.
here 卡塔尔世界杯常规比赛时间 reports on:
overall, the u.s. economy added 142,000 jobs last month, 47,000 of them in professional and business services. meanwhile, the unemployment rate was little changed at 6.1 percent.
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job satisfaction and retention benchmarks
