Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Buying a Block of Fees

Gem7321Gem7321 Experienced MentorDevonMAAT, AAT Licensed Accountant Posts: 1,438
I have the opportunity to buy a small block of fees from a downsizing accountant. This will be the first time I have seen this done. If anyone has any experience of this I'd be extremely grateful if you could share your thoughts.

I am in a rural location so I don't have a broker who would deal with this sort of business nearby. I'm also struggling to find a solicitor who has knowledge of this sort of transaction in this industry so any comments are gratefully received! Have any of you successfully purchased a block of fees without involvement from a broker or solicitor?

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    Not bought, but I have sold. If it's small, then it's probably not worth the costs or involvement of a solicitor. Neither party used one for mine, but we were both confident we could handle it ourselves. My buyer drew up the contract and we hashed it out together.

    If you want to talk to me about it in private and look at details, what payment terms to haggle for, etc, please do (you're on my Facebook right?)

    xx
    mrme89
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    I think that's probably a bit extreme; its just a case of understanding the risks vs benefits (as with anything).
    For me it helped that my buyer and I knew each other professionally anyway.

    If you're struggling to find a suitable solicitor then it's a moot point anyway.

    You want to do an OBSCENE amount of due diligence. I mean, an utter [email protected] load of it.
    mrme89
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    You're absolutely right. But the issue is on a small deal, which Gem is talking about, the costs of a solicitor can make the whole deal prohibitive. I'm not sure what a solicitor could do, for a fee that wouldn't make the deal not cost effective.

    I've no idea what your experience is in such things, but I have a considerable amount of experience in both assisting clients to sell their business (very large deal, very large solicitors fees, which were of course essential), and various options for disposing of my own practice and buying out a business partner.

    Your advice is excellent general advice, but sometimes the circumstances require some situational decision to be made, and in Gem's case, I wouldn't discount the idea of doing it without legal advice.

    As you say, to each their own.
    mrme89
  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    Thanks both. I have to say I would prefer to use a solicitor for peace of mind, but I would want to use someone fairly local with experience in this sort of transaction/industry which is proving difficult. I feel a little better now knowing it can be done without the involvement of a solicitor.

    @Monsoon I will definitely take you up your offer and send you a message later. Thank you.
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    I have not sold but I have attempted to buy. It was not a small block though but a whole practice for around £150k. It all broke down at the very last minute as the current owner had a change of heart. Cost us a fair amount in solicitor fees though.

    Again I'm happy to discuss my experiences but they may not have a lot of relevance given it was a whole practice with staff and premises.
    Regards,

    Burg
    Gem7321
  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    Thanks Ian, I would be interested in hearing from you if you don't mind. I'm free tomorrow morning for a chat if that's any good for you?
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    YEs I'm around tomorrow. I'll PM you.
    Regards,

    Burg
  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    Thanks
Sign In or Register to comment.