Keep mergers on track.

Mergers are complex processes that may derail unless the two entities forge a common path. Whether a CPA firm is merging with another firm or consulting with a client that's considering it, a simple checklist will help facilitate the process. Before sealing a deal, the parties should think about their long-term plans and address--in detail--all aspects of financial, product, plant, timing and human resources responsibilities.

Will you be better off "married"? Whether your firm is thinking about merging or is assisting with a client merger, the first order of business is to be sure such a move is in the entities' long-term interest. To gain that understanding, the parties should

[] Identify the reasons to merge. Are they to increase the firms' or the client's geographic market, to increase services to current clients or to respond to competition?

[] Perform a postmerger profitability assessment. Look at both firms' or clients' practice strengths and weaknesses, and get answers to questions such as: In what ways will the merger create savings or increase business? Who will be in charge? Will staff become redundant? Are there any off-balance-sheet liabilities such as retirement obligations?

[] Analyze the firms' practice areas, practice mix and logistical factors for whether efficiencies that can't be achieved by other means will result.

[] Decide whether to use consultants in the merger process. If so, specify how you--or your clients--want to use such help. Determine the costs and fee arrangements.

[] Report initial findings to the firm or client management committee or partnership.

[] If the firm or its client wants what a merger has to offer but has no specific candidate, initiate a search for one. Useful sources of information are business acquaintances such as customers and competitors, financial publications, third-party consultants and search firms.

Next, make it work. Once a firm or client knows with whom it wants to merge, the parties must

[] Decide on a name for the combined entity.

[] Assess and fine-tune other major logistical issues such as creating a common information base for clients, products, procedures and personnel.

[] Analyze the two entities' business mix to determine how to enhance a joint service and client-development strategy.

[] Look at the practice niche management and service delivery to restructure internal accountabilities as needed.

[] Integrate the two entities' benefit programs and tax considerations.

[] Document everything when preparing the merger agreements (before, during and after).

[] Craft an implementation program that outlines the actual joining of the firms and adheres to a pre- and postmerger schedule. A merger committee might perform these specific tasks or assign them to subcommittees.

Source: Adapted from "A Practical Consideration Merger Checklist" by Gary R. Garett, www.wbpartners.com.