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Why Your Solo Practice Needs a Succession Plan

Apr 10th 2018
handing off keys

If you’re a solo practitioner, ask yourself what would happen if you were suddenly disabled, got hit by the proverbial bus, or just decided you were done.

Who would take care of your clients? Who would know the passwords and logins so they could access your files and make sure all those filing deadlines are met? Here’s a story of how it can go wrong if there’s no plan in place:

One of my neighbors had a successful airplane repair business, then his accountant passed away. I gave him my business card for the CPA firm I had just started working at, 25 miles away in Albuquerque. He never contacted my firm, so I figured he had chosen a cheaper local option.

Fast forward a decade or so, and my neighbor passed away. It was then that his widow discovered he hadn’t filed a tax return since his accountant died.

Now she had a huge and expensive mess to deal with, and was furious at her husband’s irresponsibility. Of course, he was the one who chose not to file tax returns for ten years, but it got me wondering if there was anything solo practitioners ought to be doing so that their clients are taken care of in case of death or disability.

Having a PCA in Place

Maybe if another local accountant had contacted him and offered to help him file taxes for the year his long-time accountant died, he would have kept his tax filing up to date. Apparently, we’re great at telling our clients they need to create a succession plan, but not so good at that for our own businesses, as confirmed by a 2016 survey by the Private Companies Practice Section (PCPS) of the AICPA.

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