How to contingency plan for life’s challenges

This article was current at the time of publication.

For Liz Shimmin FCPA, CEO of Bluebird Accounting, a challenging life event unravelled her personal life and put the family business under immense pressure. 

Pregnant with her third daughter in late 2023, she and husband and business partner Julian Shimmin CPA were told that their baby, Gracie, had heart complications that would impact her survival and ability to thrive. 

“These things happen to other people, but now they were happening to us,” says Liz Shimmin, a former chair and current member of CPA Australia’s Victorian Public Practice Committee and Victorian Division Council. 

The couple underwent extensive counselling and, after much heart-wrenching consideration, decided not to continue with the pregnancy. 

Shimmin focused on delegating almost everything to ensure that services for clients would continue while she took a five-month leave of absence. 

“I was mindful of my ethical responsibilities that taking a step back for longer than anticipated was in the best interest of both the business and me,” she says.

Values and systems a priority

No matter the reason, issues around handing over clients, records and responsibilities need to be addressed and planned, says Stephen Jones FCPA, an adviser with Succession Plus. 

“It’s probably easier for people in large firms, where there will be other people who can take up the slack,” he says. “But small practices and sole practitioners need to have systems in place for these contingencies.”

The same is true for accountants who are retiring and need a succession plan, says Jones.

“For me, getting clear on my values and purpose, including within the business, was the first step to devising an effective contingency plan,” says Shimmin. “I desperately needed to recover after a very traumatic decision, and I had to consider what I could let go of. 

“We had December and March BASs and May lodgements to deal with, but there were other tasks that could wait.”

Strong relationships with clients, who trusted the firm to keep their lodgements up to date, helped make the short-term squeeze easier. 

Take a detailed view of day-to-day business

Shimmin suggests creating a working document that addresses all areas of the business, then share it with all team members.

“I needed to outline what only I could do and what others could help me with,” she says.

“I also identified tasks that were not actioned in my absence and have since put arrangements into place where a particular team member is assigned to a particular task, taught how to do it, and trusted with that.

“As a small team, everyone is also expected to be hands-on, and there for each other.”

No matter the size of your accountancy firm, taking a broad and detailed view of the servicing client accounts is essential when drafting a contingency plan, says Jones. 

“For sole practitioners, a practice overview document designed to assist someone in a caretaker role should include every detail from business assets and client base to billing practices and the name of the real estate agent leasing commercial premises to your firm.

“It is also essential to identify a CPA ‘caretaker’ who aligns with your values.”

Leverage technology and external support 

Jones says there’s also an argument for choosing an accountant who uses the same software, given that most financial records are now digital. 

“A major obstacle for reassigning work can also be two-factor authentication,” he warns. “The only way around that is to have someone as an authorised person on the account,” he says.

“A good tech specialist, who can help with software and access issues, is a valuable contact, particularly for small practitioners.”

With Bluebird Accounting operating completely paperless, every team member has access to every document that is client-related, says Shimmin. 

“Julian takes care of the wages. It is important to have someone you can rely on or trust who can do this for you if you can’t. For example I have clients who have authorised our firm to upload a wages file to their bank for authorisation if they are in a hospital bed.”

She adds that being well connected with other public practitioners shored up her confidence while she was absent from the business – “some offered assistance if needed”.

“Remaining chair of the Public Practice Committee also helped me progress through that tough time. Being of service in an advocacy role gave me a purpose.”

Conduct regular reviews and training 

Once a contingency plan is in place, it shouldn’t be a set-and-forget document, says Jones.

“A six-monthly check of your plan, or a check in with the CPA who will assist you is a smart approach.”

A will with clear terms about what should happen to the practice in the event of permanent incapacity, a power of attorney, and insurance including professional indemnity, are other things to consider. 

It’s also important to assess any gaps in staff skills, education, or experience and address them through training before an unexpected event occurs. You can download a practice review here.

Shimmin says the firm now holds six-monthly   training programs, including contingency and succession planning.

“During my absence some things did go by the wayside,” she admits. “For example, the team had no meetings. But, for me, it was very much about understanding what triggered concern and what didn’t.

Her advice to other practitioners? “Take the time you need to recover and, above all, have compassion for yourself.”