What happens to your staff when you sell a billing company

If you’ve got two billers who’ve been with you for fifteen years, this may be the part of a sale that keeps you up at night. They know your clients better than anyone, and they’ve trusted you with their jobs.

What a buyer sees

Your staff can be the most valuable thing in the sale. Clients often know them by name, and they know how each account works. A buyer who keeps them may lose fewer clients.

On the other hand, a buyer who already has a billing team might not need them, particularly in a client list sale. Their plan for your people is something you should ask about at the very first meeting, because it may help you choose between buyers.

Whether they transfer at all

The structure of the deal decides what happens legally. In a sale of the company itself, the employer usually stays the same, so jobs tend to carry on. In an asset or client list sale, the buyer doesn’t take on your employees by default. They might offer jobs to the people they want, and you may have to end employment for the rest.

Have your attorney check what that means in your state, including final pay and accrued vacation. Contractors are different again. Check their agreements, and check that they’ve been classified correctly, because a buyer’s going to ask.

When to tell them

There’s no perfect time. Tell them too early and you risk losing someone before there’s a deal, or word reaching a client. Tell them too late and you may damage the trust you’ve spent years building.

Many owners tell a key person or two once the terms are nearly settled, under a confidentiality request, and tell everyone else close to signing. You’ll want the buyer’s agreement on timing, since your NDA may restrict who you can tell. Make sure staff hear before your clients do, since clients will start asking them questions.

What they’ll want to know

Try to have answers before you start the conversation:

• Do I still have a job, and for how long?
• Who will I report to, and will I have to move or change hours?
• What happens to my pay, benefits and accrued vacation?
• Does my service count with the new employer?
• Why are you doing this, and when will you leave?

If you don’t have an answer, say so and tell them when you will. They’ll cope much better with that than with vague reassurance that later turns out to be wrong.

Things you can negotiate for them

You’ve got the most influence before you sign, so that’s when to raise these:

• A commitment to offer jobs to named people
• A minimum period of employment, or severance if they’re let go
• Recognition of their years of service
• A stay bonus for the handover period, paid by you, the buyer or both

A stay bonus is often worth it. If a key biller leaves in the first month, clients may follow, and that can directly reduce what you’re paid under a revenue share.

If it’s just you and a part timer

The same questions apply, on a smaller scale. A part time biller who knows three of your accounts could be very useful to a buyer for a few months, even if there’s no permanent role. Ask whether they’d stay through the handover, and be open with them about how long the work will last.

For more on getting ready before any of this comes up, read how to make the company less dependent on you.

Fieldstone may be a buyer in a sale like this, so read this guide with that in mind. It's general information, and it isn't legal or tax advice.