The safest handover date is not automatically the quietest month or the day after year end. A buyer should reconstruct when work actually arrives, where it queues, who can prepare and review it, and which deadlines fall shortly before and after settlement. The purpose is to enter the first peak with controlled capacity—not merely with the seller’s assurance that the practice has “always managed”.

Plan from client- and job-level evidence across at least two comparable cycles where available. Then match settlement, seller support, staff leave, system changes and contingency capacity to that evidence. A single revenue chart or list of statutory dates does not show when the work was performed or how much pressure it created.

Reconstruct the practice’s real annual cycle

Start with a month-by-month production map. Request exports from the practice-management, workflow, time-recording and billing systems showing job creation, client information received, work started, review, completion, lodgement and invoice dates. Reconcile these with work in progress (WIP), timesheets, invoices, write-offs and the ATO client list.

Separate jobs by service and client type: individual and entity tax returns, business activity statements, fringe benefits tax, financial statements, payroll, bookkeeping, superannuation work and advisory projects. A practice may describe July to October as its peak, while its records reveal a second review bottleneck before later agent-program dates, quarterly BAS surges, or recurring advisory work that competes for the same senior staff.

The ATO explains that the tax agent lodgement program provides extended dates to help registered agents manage work throughout the year, subject to program settings and performance expectations (ATO). That does not make a published due-date table a capacity plan. Due dates can depend on obligation and client circumstances, so the buyer should verify the current program and the actual dates shown against each client rather than copying a prior year’s calendar.

Distinguish deadlines from when work becomes possible

For each recurring job, capture four dates: the formal due date, the date the practice requests information, the date the client supplies a complete pack, and the date the work reaches review. This reveals whether pressure comes from fixed deadlines, late client information, weak follow-up, slow preparation or limited reviewer capacity.

Ask for the monthly pattern of outstanding-information reminders, overdue jobs and extensions or deferrals. A deferral is not spare capacity. The ATO says deferrals are intended for exceptional or unforeseen circumstances, monitors their use, and applies eligibility and time limits that vary with the obligation and request type (ATO). If the seller routinely relies on deferrals to make the calendar work, investigate the cause and do not assume the same outcome will continue.

Test WIP and backlog at the proposed settlement date

A headline WIP balance hides the operational risk. Obtain the open-job register at several month ends, not just the most recent balance sheet date. Each job should identify the client, service, stage, preparer, reviewer, hours or costs incurred, fee basis, missing information, due date, expected completion and whether an invoice can be raised and collected.

Look for ageing WIP, work marked “nearly complete” for months, jobs awaiting a departed employee, unrecorded write-offs and client promises kept outside the workflow system. Reconcile selected files to timesheets, correspondence, lodgement records and subsequent invoices. Determine what unfinished work and associated billing rights or obligations transfer at settlement, with legal and accounting advice.

The acquisition plan should also identify work that is technically complete but still exposed to queries, amendments, complaints or collection effort. Completing a return does not necessarily release the person who understands its judgements.

Measure capacity by role, not just headcount

Build a capacity model for preparers, reviewers, client managers, administration and any specialist work. Use actual productive hours, leave, training, part-time patterns, contractor availability and review ratios. Identify tasks only the seller or one senior employee can perform. Overtime recorded in payroll and timesheets is evidence of the historic operating model, not free capacity for the buyer.

Where APES 320 applies, its quality-management elements include resources, engagement performance, information and communication, and monitoring and remediation (APESB). A peak-period plan must therefore protect supervision and review as well as raw preparation hours. Moving more files into production can worsen the queue if review remains concentrated in one person.

Employment settings need separate advice. Under the National Employment Standards, maximum weekly hours include 38 hours for a full-time employee unless different ordinary hours apply under an award or enterprise agreement, plus additional hours only where reasonable; reasonableness considers factors including health and safety, personal circumstances, notice and compensation (Fair Work Ombudsman). Buyers should cost lawful overtime, time off, leave and temporary support rather than modelling the first peak around indefinite extra hours.

Choose the handover window from the evidence

Compare at least three settlement scenarios:

Scenario Potential advantage Question to resolve
Before a peak Buyer observes a full cycle and can meet clients early Is there enough time to learn systems, allocate files and secure access?
During a peak Seller’s knowledge is immediately available on live work Will divided authority slow decisions or increase errors?
After a peak Immediate workload may be lower What backlog, WIP and staff fatigue is being inherited?

For each scenario, model weekly jobs entering preparation, expected client-document arrivals, preparation hours, review hours, leave, seller hours and a disruption allowance. Stress the model for a delayed software migration, key-person absence and a higher-than-expected volume of incomplete files.

Hypothetical example: a seller calls September the busiest month because most client calls occur then. Job data shows the larger risk is February, when late December-quarter information, entity returns and accumulated review work converge. A January settlement with only two weeks of seller availability would therefore create more risk than the sales narrative suggests. This is an illustration, not a prediction or benchmark.

Turn seller support into peak-specific deliverables

Avoid a general promise that the seller will be available. Schedule named responsibilities around the work map: triaging inherited WIP, explaining unusual files, joining priority client calls, reviewing a defined set of jobs, documenting recurring judgements and attending weekly exception meetings. State hours, response times, authority boundaries and the point at which buyer personnel take control.

The handover should also cover client communications, document-request campaigns, leave approvals, contractor onboarding and contingency triggers. Decide in advance what happens if incomplete jobs exceed the plan, review capacity falls below a threshold or a key employee leaves. Ask the lawyer how obligations, access, professional responsibility, fees and any failure to deliver seller support should be documented.

Buyer questions before committing

  • Which five weeks had the highest hours worked, jobs completed and WIP balance in each available year?
  • When did clients actually supply complete information, and how many reminders were required?
  • Which deadlines, client groups and services compete for the same reviewer?
  • How much overtime, contractor cost, leave deferral and owner labour supported prior peaks?
  • What open jobs, unresolved queries and unbilled work would transfer on each proposed settlement date?
  • Which workload assumptions fail if the seller, a senior reviewer or a key system is unavailable?
  • What evidence will show that the buyer can run the next peak without seller dependence?

Sources

Disclaimer

This article provides general information only. It does not constitute legal, tax, accounting, financial, credit, valuation or other professional advice. Circumstances differ. Obtain advice from appropriately qualified advisers before acting or entering a transaction.