AT WHAT POINT do senior partners stop paying for themselves in terms of bills issued each month, and start being a drain on the business?
One of my senior partners would have me believe that he still contributes more than he takes out, but when I sit down and analyse the bill book each month, the figures just don’t add up.
I believe that it’s at this point in a practitioner’s career that he should go from senior partner to consultant.
The problem we have, though, is this is not on his ‘to-do’ list at the moment, and with the banks being reluctant to lend to practices over any reasonable period of time, the other partners find ourselves in a difficult position of not being able to buy him out.
I’m a firm believer that all partners, while still active in the business, should contribute to the top line every month by putting bills in the book. It’s not enough to rely on historic clients if the only work that gets billed is accounts prep/audit work. Surely, the partner responsible should be billing the value-added work on a regular basis to justify his cash drain on the business?
One argument frequently used against this by the senior partner in question is that he is out trying to develop the business by winning new work. This would be perfectly fine if it was the case. He is gallivanting across the county, incurring huge expense bills entertaining ‘potential new clients’ without a great deal of success.
It’s clear to me that his time to go from senior partner to consultant is upon us. Telling him this won’t be easy, but what’s the alternative? Continue to bleed money paying him for work he’s no longer doing?
Answers on a postcard addressed to Accountancy Age, The Practitioner.
The Practitioner’s uncensored thoughts come from the coalface of a regional firm in the heart of England
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