Practice continuation plans are essential for CPAs. They ensure clients are taken care of and preserve the value of a practice, especially for small to medium-size firms, if an owner or sole practitioner falls ill. Here are some tips on how to get a plan started:
Create a list of resources and phone numbers ,
including your professional liability insurance carrier, state and
local CPA societies and their member crisis hotlines, utility
providers and facility managers.
Assemble a set of operating documents , divided
into sections including client lists, profile of proprietorship
(executives, location of accounting records, contracts and bank
accounts), procedures to monitor ongoing work, and the location of
workpapers, personnel files and billing schedules.
Decide on the type of continuation arrangement:
one-on-one (usually a buy-sell agreement); group (several
CPAs act as successors/partners to each other’s firms); or state
society plan (local societies or MPA committees assist in finding a
successor).
Identify and partner with a suitable firm by
receiving referrals from CPA societies, bankers, attorneys or
community groups.
Implement the plan by writing instructions for all
involved parties with your attorney and setting dates for annual plan
reviews.
For additional resources or detailed guidance, refer to the AICPA Management of an Accounting Practice Handbook or “ Have a Fallback Plan,” JofA , Sept. 03, page 57.
Source: CAMICO Mutual Insurance Co., www.camico.com .
