The role of the accountant in business succession planning in selected Maltese family owned SMEs

Abstract

Purpose: This study seeks to evaluate the role of the accountant in Business Succession (BS) planning of family owned Small and Medium Sized Enterprises (SMEs). The researcher aims to understand the perceived importance of having a BS plan and the SME owners’ experiences in developing a BS plan, in particular the involvement of the accountant. Design: This study adopted a qualitative research approach and is based on thirteen interviews. Seven interviews were conducted with family business owners or representatives delegated by the owners and six interviews were carried out with accountants operating as Small and Medium Practices (SMPs). Findings: Awareness on BS planning amongst family businesses has increased substantially and greater number of business owners are devising a BS plan for their business. All participants highlighted the crucial importance of BS planning in ensuring business continuity and survivability. The importance and the usefulness of accountants during the BS planning process was confirmed in this study, especially in providing advice and assistance on the ‘hard’ technical issues. Business owners value the importance of, a long-term relationship with their accountant built on honesty and trust, their accountant’s ability to listen and their knowledge about the business. The findings also indicated that accountants mainly collaborate with lawyers, notaries and tax advisors during the process. Conclusion: Every family business is unique and the issues that may arise are different and thus would require tailored made advice and assistance. Accountants seem to be the first point of contact for business owners when they find themselves in need for advice during BS planning. Accountants were mainly sought for advice and assistance on the ‘hard’ technical issues rather than on the ‘soft’ personal and family related issues. This study concluded that the role of the accountant is key in BS planning. Value: The study is expected to provide insight on issues faced by business owners during BS planning and on the role of the accountant during the process. This research is expected to raise awareness on the crucial importance of BS planning and the role of the accountant in guiding and assisting business owners and their family in any difficulties or issues encountered during the process.