The firm most owners think they are selling and the firm a buyer is actually valuing are different firms.

Owners describe profitability, revenue, and years in business. Buyers price transferability — the likelihood that the revenue continues after the person who generated it stops being there. A highly profitable practice in which every significant relationship runs through one partner's personal credibility is worth less than a modestly profitable ...

The question clients ask is which plan is best. The question that answers it is narrower:

How many employees are there, and does the owner want to put in the maximum?

Almost every selection error comes from answering a different question than that one — or from failing to notice that the client has employees they did not mention.

The Structural Difference

The three plans differ in one respect that drives everything else: who can

Somebody has just told you they think the bookkeeper is stealing.

What happens in the next few hours largely determines whether the matter ends in a documented recovery or in an unprovable suspicion, a wrongful termination claim, and a denied insurance claim. Almost every instinct at that moment is wrong.

Before Anything Else: What Not to Do

Do not confront the suspect. Not to "give them a chance to explain," not to gauge their reaction. A

Career advice for CPAs usually compares these three paths on compensation and hours, which is the least useful comparison available. The compensation ranges overlap, the hours claims are unreliable, and neither tells you the thing that actually determines how the next fifteen years go.

The thing that determines it is which doors each path leaves open.

The Asymmetry

State it first, because everything else is a detail underneath

The question CPAs ask is "which securities licence do I need." The question that actually determines the answer is different:

How are you going to get paid?

Not what you want to advise on, not how sophisticated your clients are, and not which exam looks more impressive. Compensation structure determines the licence, and once you know the compensation structure the rest follows almost mechanically.

The Two Paths

Fee-based advice about

The reason to write this policy now is not that a rule requires it. It is that your staff are already using these tools, and a firm without a policy does not have no practice — it has an undocumented practice, established by whoever downloaded something and started pasting client information into it.

That is the actual risk, and it is a confidentiality risk before it is anything else.

The Principle the Whole Policy Rests On

Write

An S election changes how the owner gets paid, and the payroll consequences are immediate, mandatory, and routinely botched in the first year.

The characteristic failure: a client elects effective in January, takes distributions all year as they always did, and arrives in December needing to run a large catch-up payroll they have not budgeted for and cannot comfortably fund. That is an avoidable problem and avoiding it is mostly a matter of setting things up in the ...

Accountants present what they prepared. Audiences need what they must decide. That mismatch is the whole problem, and it produces presentations that are technically flawless and functionally useless.

The deliverable here is understanding, not accuracy. A correct presentation nobody follows has failed at the only thing it was for.

Start With the Decision, Not the Statements

The diagnostic question that reorders everything: what is this person