March 13th, 2026
If succession planning is moving up your priority list, you may be wondering where to begin. It’s a big, long-term change, but breaking it into smaller steps can make the process manageable.
In the first article in this series, we discussed why succession planning matters. In this post, we focus on the practical first steps of evaluating your practice and identifying a successor.
Key steps include organizing your operations, documenting responsibilities, identifying potential successors, and preparing the business for a smooth ownership transition.
Before transitioning ownership of your practice, the business must be organized. You can’t simply hand over the metaphorical keys if the house is in disarray.
Preparing your practice now creates the structure and clarity your successor will need to operate the business without you.
Your client base should be organized in a clear and consistent way. Whether it’s by industry (real estate, healthcare), entity type (LLCs, S corporations, C corporations), service type, or level of complexity, the classification system should be consistent and documented. Review your CRM to ensure your client tracking is in order and a clear process is in place.
Client segmentation should also align with staff assignments so your successor understands who handles each relationship. Indicating which team members are responsible for each segment not only improves operational efficiency but also helps your successor identify the appropriate points of contact for questions and client relationship management.
Your services should also be clearly organized and documented. This includes services such as tax preparation, bookkeeping, payroll, tax planning, consulting, and audit representation. Review projects to ensure they are labeled and assigned to the correct client. Ensure that billing procedures are documented and that engagement letters are stored in their respective folders.
Create an inventory of the technology your practice relies on, such as your CRM, tax preparation software, payroll platform, and other systems. Make a note of each platform’s costs, billing cycle, and renewal dates. Keep a secure record of usernames and passwords and a list of staff or partners with applicable software access. Document who administers each system so your successor knows where control resides.
Review your practice’s professional credential (CPAs, EAs, PTINs) record system to ensure every team member’s license or registration is up to date and properly documented. The records should include information such as licensing numbers and expiration dates.
Once your practice is organized, the next step is identifying the responsibilities your successor will take on.
You’re likely so accustomed to your role that much of your work happens on autopilot. Someone new stepping into your role, though, will need help navigating the position.
You should outline both your day-to-day and recurring tasks, so your successor has a map of your responsibilities, priorities, and workflows.
Examples include:
Consider creating a calendar to share with your successor, documenting recurring tasks and when you normally address them, or a checklist for your daily routine. Adding notes in specific client folders may also be helpful.
Every firm has “go-to” people for certain issues. This is the person who understands complex tax law questions or can troubleshoot software problems. Identifying these informal roles will help your successor know where to turn for support.
Identify any tasks or decisions handled by only one person. If that individual becomes unavailable, the process could stall.
Consider cross-training another team member or documenting the process so nothing critical is missed.
Once your practice is organized and your processes are documented, the next step is deciding who may eventually take over the business.
Common pathways to choose from include:
Hybrid Options: Your role is absorbed by current partners or employees, or selling the part of your business you currently handle to another practice.
Tax practices vary widely. Each one has its own service mix, niche expertise, culture, and long-term goals.
Selecting a successor is essentially the process of choosing the person who will eventually replace you.
Before selecting someone, it’s important to assess whether the candidate has the sort of qualities and competencies that fit with your practice.
Key skills to consider when evaluating potential candidates include:
Succession planning for a tax practice is a process, not a single decision. Start by organizing your practice and documenting your responsibilities so your successor has a clear path into the role.
From there, you can begin identifying candidates who have the skills, experience, and values needed to lead your practice forward.
In the next blog, we’ll discuss how to manage and communicate the transition to your clients and touch on best practices for keeping your plan up to date.
By Ashley Akin, CPA
Sources:
Disclaimer: The information referenced in Tax School’s blog is accurate at the date of publication. You may contact taxschool@illinois.edu if you have more up-to-date, supported information and we will create an addendum.
University of Illinois Tax School is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. This blog and the information contained herein does not constitute tax client advice.
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