The firm’s origins dates back to the mid 1980’s, with it now servicing all of Geelong and its surrounding districts. The region has been experiencing a strong housing market, accompanied by a growing population as people relocate from Melbourne to take up opportunities with organisations now operating in the region.
It has maintainable fees of $513K for accounting and $100K for financial planning, generated from its broad ranging services within these two divisions. Tax lodgements for the 2021 tax year represented roughly 10% of fees or 375 ‘I’ returns, 13 partnerships or 3% of revenue, 60 trust returns at 21% of fees, 37 company returns or 15% of fees, 34 super returns at 15% of income. The remainder is distributed across BAS at 6%, management advice with 10% of fees, corporate secretarial at 2%, financial planning roughly 15%, and other income at 3%. The firm’s average tax lodgement size is around $1K.
The 2021 FY incorporated 345 accounting client groups, the bulk of which, some 48%, contributed annual fees of between $3K – $20K, with a further 20% from those annual fees of $20K+ The firm’s overall average client size is circa $2.3K per annum.
The top 20 accounting client groups for the 2021 financial year contributed approximately 45% of annual fees, the largest of which equated to around 7.3% of revenue. Many of these are in the greater Geelong area and represent a range of industries. All but one group has been with the firm for 10, 20, and in some cases, 30+ years, with the age of the key contacts ranging from late thirties to early eighties.
The financial planning division is a separate legal and operating structure, which shares the accounting practice’s staff and facilities, and operates purely on a fees for service basis with no commissions received. Only a small proportion of the firm’s accounting clientele have currently been offered financial planning.
Most of the top financial planning 20 clientele based on FUM are aged between sixty and sixty nine years, again in and around the greater Geelong area, and half of which have been provided with these services for over twenty years. Additionally, the top 20 client groups based on revenue contribute some 77% of the overall FP revenue, with the largest client of which is 8.3% of annual fees.
New business is in the form of advice and implementation, whilst recurring revenue is generated via advice, implementation and portfolio reviews. FUM for 2021 was around $30.5 Mill across a mix of fund managers and asset types. A steady rate of enquiries is currently being experienced by this division.
Standardised workpapers and processes are utilised, with tightly controlled lodgements, WIP and debtors. Bad debts are minimal. Utilised software includes MYOB AE, BGL 360, Reckon, Xero and QuickBooks.
The premises are owner occupied with rent currently $2.5K per month plus GST and outgoings. The preference would be for the purchaser to remain in the current premises for at least the transition period. A longer lease commitment can be arranged with a lease available subject to market review.
It is now time for this sole practitioner to retire, however they are willing to assist with a transition for up to 24 hours per week for one year.
E-mail broking@robknightsbroking.com.au to request a confidentiality agreement or phone (02) 9233 4333.
The completion of a confidentiality agreement is essential prior to the supply of any information.
