Monday, 14 December 2015

Accountants with high-net-worth clients are well positioned to get significant remuneration for their practices and their efforts. The key is doing a deal that is not a conventional sale of an accounting practice

By Russ Alan Prince 

Home - For a number of reasons, there is increasing pressure on many smaller and mid-sized accounting firms to sell. Most of these deals have a similar arrangement where the multiple is based on the firm’s revenue – around one times annual earnings.

In these acquisitions, the presumptions often include operational synergies with accompanying decreased costs and that the sellers will be able to transition their clients. In a great many cases, these premises are in error resulting in “bad feelings” and the sellers failing to obtain all the monies they expected. For example, there is regularly the belief that the sellers will grow their practices for a period of time even when they were apparently not able to do so before the sale. Moreover, many times the operational synergies do not occur.

Read the full story here. 

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