Has anybody got any knowledge of buying a block of fees from another accountant?
I have been helping a local accountant for a few years now and they have said that they would like to retire sometime in the next 12 months. They have offered me first refusal on buying their client base which has recurring fees of around £ 60k. He has said he would like as close to 1 x the fee base so between £ 50-60k. To take on th eextra work I would need at least one more pair of hands, maybe two so need to look into this too.
I have done some research and this seems to be quite normal for the profession. Does anybody have any pointers that I should consider before jumping in feet first.
@Don Tax I have reuqested a breakdown of fees by client type and work type as advised.
@gbm From my research it seems to be the norm to pay a % up front and then the balance in 12 -36 months depending on the size of the fees purchased. The accountant selling the fees has said he wants 60% upfront and then the final 40% in the next 18 months - payable on a monthly basis.
Will let you know how this progresses, i'm not 100% sure I actually need to buy the fees as if nobody else buys the fees then all of the clients will have to look elsewhere when he retires and they may pick me anyhow.
Not sure if you've thought about this but I'd factor in a "clawback" on the fee, if the client leaves within the first 12months. If the client leaves or ceases trading through no fault of your own, I don't think I'd be happy paying , say, a full years income.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
I don't think on the whole client's like being 'sold' to the highest bidder. To maximise the chances of their staying with you (best for both parties) become their point of contact, as far as possible, during the next twelve months.
Re-direct calls and emails, work at his office, reply on same letterhead but with different address....... whatever it takes to make the changeover as seamless as possible.
