When acquiring a CPA firm, there are many things to consider for a worthwhile purchase and smooth ownership transition. Consider our tips for success here.

Acquiring an accounting practice can be a great investment; instead of starting from scratch, you can take hold of a company that comes with an established client base and proven revenue stream. If you’re acquiring a CPA firm, let us help with tips for a successful purchase and ownership transition.

Consider the Services Offered

First, when deciding which accounting firm to buy, you’ll want to thoroughly research the potential practices available, particularly regarding their offered services. Specifically, you’ll want to examine how focused their offerings are and if their client base reflects these services.

Firms with niche services and client bases do better than those that try to do a bit of everything for different clients. With accounting practices in particular, being great at a few things is more profitable than offering every CPA service under the sun. Too many different services can mean a staff that is spread too thin and a firm without a vision for success.
Conduct a Thorough Audit Before the Transition

Prospective CPA firm buyers will also want to conduct an exhaustive audit of the business’s financials. Nobody wants to acquire a struggling firm with no future, so you’ll want to ensure the CPA practice has at least some viability and potential for future success.

One metric to examine is the cash flow to the owner. The cash flow to the owner indicates the firm’s profitability. A CPA firm for sale may not be the most profitable, so it’s wise to first make a benchmark of a cash-flow-to-owner number before making the leap.

Retain as Many Key Staff as Possible

When acquiring a CPA firm, an important tip for success is to retain as much of the company’s longtime key staff as possible. The first goal of the new owner of the accounting practice should be to limit staff turnover and retain clients.

Staff turnover meshes with client retention, so the best strategy for for retaining clients when buying an accounting practice is to keep key staff on board. These integral staff members have relationships with clients, and if they leave because of new ownership, their clients will likely follow them. No new owner of a CPA firm wants to start their tenure hemorrhaging staff and clients.

Communicate With and Reassure Clients

As we discussed, keeping the current clients on board with the new ownership during the transition must be a priority for new owners. The best way to retain clients is for the new owner to communicate and reassure them.

Clients become apprehensive when the firm they’ve built a relationship with over the years is under new ownership, and hearing from the new owner can do much to put their minds at ease. It also gives the new owner a chance to make an impression and outline their vision for making the accounting practice better for clients in the future.

If you’re considering purchasing an accounting practice soon or in the future, keep our strategies for success in mind. Look for niche CPA firms, and if you do make the acquisition, maintain stability during the transition by retaining staff and reassuring clients.