How to sell my accounting firm?

You might be wondering:

– How much will my accountancy practice sell for? 

– How do I determine an asking price? 

– How do I find potential buyers to sell my accounting firm?

– How to sell my accounting practice through a broker?  

On the last question:  Use a broker when you only need a connection to a buyer (i.e. when selling real estate or stocks).  Instead, use an M&A advisor to sell your business because what you need is vastly more complex.  Details on that and more answers are ahead.

Think Years, Not Months

If you’re wondering how to sell your accountancy practice and walk away after closing, it isn’t possible.

Much of the value of an accounting practice is tied to its owners — to their expertise, reputation, and relationships.  In most successful sales, that value is transferred to a buyer over a multi-year transition during which the seller works 2 to 35 hours per week.  The seller should have a sales- or profit-sharing incentive to complete an effective transition.  Consequently, most accounting firms cannot simply be sold for just a fixed payment at closing.  This is especially true for selling a small accountancy practice.  It applies to public accounting, tax accounting, forensic accounting, and bookkeeping firms to varying degrees, and largely depending on firm size.

Seller Beware: Protect Yourself

Because selling an accounting firm entails sharing sales or profit with a buyer you have just met, you need protection.  We recommend the following:

(1) List the adverse outcomes that can occur.  For each, design a resolution mechanism that protects your assets.

(2) List the possible disputes that can arise between you and your buyer.  For each, implement a binding procedure for resolving the dispute fairly and at a low cost, ideally without involving courts or lawyers.

Deep expertise in designing protection mechanisms matters.  (Hint: We are exceptional at it.)  Lawyers will draft the legal language that implements protections in a contract, but only a capable advisor can design protection mechanisms.  Proper protection design requires economics and finance expertise, not legal expertise.

Exit Strategies for Accounting Firms: Auction or Ad Hoc

Did you know you can sell your accounting firm via an auction?  If you are like other accountants and have a strong preference for orderliness, then an auction can be perfect for you. 

The first step in selling your accounting practice is selecting one of two sale mechanisms:

Option 1: Auction Mechanism

If you wonder “how do I sell my accounting practice for maximum price,” look here:

There are several differences between the auctions we see in movies and an auction mechanism for selling accountancy practices.  Here are a couple:

(1) Bids will entail several numbers in addition to purchase price.  For example, the percent of the price paid through a multi-year seller note and your compensation during the transition period are two other numbers that could be included in a bid.

(2) The winning bidder will be selected based on a valuation formula that calculates how much each bid is worth to you.

(3) The bidders will not be aware of each other’s bids.

What are the benefits of selling my accounting firm via auction?  

(1) If we have at least two bidders, then an auction will generate more value for you than an ad hoc mechanism.  This is how to sell an accounting practice for maximal price.

(2) The business is more likely to end up in the hands of the right person.

(3) The high amount of structure required for an auction forces everyone to produce and act upon a high degree of clarity early in the process.  This reduces the likelihood of the deal falling through late in the process.

What are the disadvantages if I sell my accountancy practice via auction?

(1) There is somewhat more work to do upfront:  (a) Closing documents need to be generated upfront rather than late in the process.  (b) We need to decide upfront on precisely how you would value different possible deal structures.

(2) You have less flexibility.  Once you have executed an auction agreement with the prospective acquirers, you cannot back out of it.

Option 2: Ad Hoc Mechanism

If you’re thinking, “I want to sell my accounting practice the old fashioned way, and an auction sounds too complex,” look here:

In this mechanism, we negotiate with each prospective buyer one-on-one.  If you like what someone offers, you move forward with them.  If you are uncertain about their offer, we ask them to wait until we have more offers. 

What are the benefits of selling my accounting practice via ad hoc mechanism?  

(1) Less work is required before engaging prospective buyers.

(2) You commit practically nothing to the acquirer until final closing documents are signed, which is relatively late in the process.  This implies that you are free to change your mind until then.

What are the disadvantages if I sell my accountancy firm this way?

(1) If you ask a prospective buyer to wait until you have fielded more offers, you risk losing them because they might find another opportunity.

(2) The best prospective buyer might drive a hard bargain, offering too little.  A less qualified prospective buyer might not drive such a hard bargain.  As a result, you might go forward with the less qualified buyer.  It is important that we find the best buyer because everyone wins when that is the case.

(3) Because this is a less structured process, with less agreed upon upfront, it is more likely that the deal will fall apart after a non-binding offer is accepted.  This can result in significant lost time, money, and energy.

Optimal Deal Structure

If an owner commanded, “Sell my accounting practice for the highest possible price!” then I would say, “Be careful what you wish for.  You probably wouldn’t sell at a price of $10 million paid over 100 years with a 0.1% interest rate.”

The correct mandate is, “Sell my accounting business under a deal structure that maximizes the net present value of my future cash flows, considering expected and worst case scenarios, and that allows me to exit comfortably on my realistic timeline.”

Deal structure is the set of terms in your sale contract that affect the timing, contingencies, and amount of payments you receive.

In the accounting industry, successful firms have long-term clients for which they perform annual services related to audits, taxes, and financial reporting.  It can be sensible for some of your payment to be tied to the retention of these long-term clients.

If you are open to a broader array of deal terms, you will have a larger pool of prospective acquirers.  That translates to extracting more value out of your firm.  For example, if a handful of accounting clients comprise a large portion of your services revenue, then it will be difficult to attract buyers without tying part of your sale price to the retention of those big clients.

How much do accounting practices sell for?

The deal structure is equally as important as the purchase price.  If you want to sell your accounting firm, you can value it in two ways:

(1) Discounted cash flow method.  We will analyze your current client relationships and marketing mechanisms.  Based on that, we will project your revenue in future years under a best case, worst case, and expected case scenario.  We will project your costs and expenses given their current levels.  This will allow us to project your firm’s operating cash flows under each scenario.  We will then sum up the values of each future year’s operating cash flow, discounting it by dividing it by (1+r)^number of years in the future.  We will determine the value of r by analyzing the volatility of your historic cash flows relative to historic stock market performance.

(2) Comparables method.  We have data on past sales of accounting firms.  Using comparable sales data, we will infer the value of your firm.  For example, we know that the median PLACEHOLDER1 firm sold for PLACEHOLDER2 times seller’s discretionary earnings.  That is low.  Using the optimal deal structure and selling mechanism, we can achieve a higher valuation than that.

What are the steps to sell my accounting firm?

Several of these steps occur in parallel:

(1) Consultation.  If you contact us at or (646) 755-3926, we will provide more information tailored to your accounting practice regarding everything on this page.  From this conversation, you will understand your options.

(2) Valuation.  We will conduct a valuation by the above methods.  If you wish to sell your accounting firm via an auction mechanism, we will develop a model enabling us to value every acceptable deal structure.

(3) Materials Preparation We will prepare a 50-page memorandum, 2-pager, and brief messaging that we will use to convey the opportunity of buying your accountancy business.  If you wish to sell via auction, we will work with our economical attorney or yours to develop the auction and closing documents.

(4) Targeting.  We will determine the criteria for the companies and individuals that would be suitable acquirers of your accounting practice.  Criteria can involve size, geography, specialty, years of experience, and more.

(5) Outreach.  We will contact buyers in several different ways, including contacting some of the 28,000 buyers in our network, sending direct messages to other individuals and companies who meet your criteria, and online advertisement on business for sale websites and professional job boards.  We will only introduce you to the most qualified prospects.

(6) Negotiation.  We receive offers, improve them, and work to pick the best one.  If we are using an auction, negotiation is automatic.

(7) Due Diligence and Closing.  The winning bidder conducts due diligence on your accountancy practice.  If we are using an ad hoc mechanism, then in parallel their attorney produces closing documents.  Once all of that is concluded, the deal is closed.

(8) Post-Closing.  We will be available to help make your business sale successful.  We can create accounting dashboards that calculate the the payments you are owed.  We are also available to act as administrators in any dispute resolution process described under the “Seller Beware: Protect Yourself” section.

Examples of accounting firm listings

For you to get a sense of what is on the market, here are some recent listings:

Asking Price: $490,000
Cash Flow: $200,000
Price Multiple: 2.5x
Revenue: $400,000
Employees: 3
This well established and highly respected company has served corporate and individual clients in one of Northwest Florida’s finest beach areas for more than 25 years. The business is fully staffed and operates out of a beautifully furnished suite of offices with kitchenette, 2 baths and record storage area.

Asking Price: $499,500
Cash Flow: $185,006
Price Multiple: 2.7x
Revenue: $382,441
Employees: 4
Well established (over 25 years in the Triangle) tax, accounting, bookkeeping, and consulting practice is ready for a new captain to take “the helm”. This full-service company services both business and individual clients. The motivated and experienced staff are all Certified QuickBooks Advisors.

Asking Price: $600,000
Cash Flow: $96,000
Price Multiple: 6.3x
Revenue: $602,000
Employees: 10
Established tax, small business accounting, and payroll firm in the Richmond, Virginia area. The company has been providing services to a client base of nearly 2,000 clients for more than 15 years. The firm has a very loyal following of satisfied clients.

Asking Price: $110,000
Cash Flow: N/A
Price Multiple: N/A
Revenue: $90,000
Employees: 2
This is a high-demand essential business for sale! Established client-base and owner willing to discuss a transition plan. Lots of opportunity for growth for a new buyer!

Asking Price: $695,000
Cash Flow: $292,000
Price Multiple: 2.4x
Revenue: $595,000
Employees: 5
CPA Firm for Sale in North Scottsdale, Arizona. Well over 50% of the revenue is derived from business clients. The firm has fostered professionals including doctors, dentists, lawyers, financial advisors and pilots. The firm has a strong cash flow margin and excellent tax return margins. They use a fixed fee model and receive payment monthly for bundled services such as tax return and accounting work.

Asking Price: $1,600,000
Cash Flow: $350,000
Price Multiple: 4.6x
Revenue: $1,000,000
Employees: 7
Great opportunity for absentee or remote ownership. This is a well established firm with over $900,000 in annual revenue and a high annual growth rate. Revenue for 2020 expected to be greater than $1,000,000. The client base is focused on small-to-medium sized businesses and high net worth individuals. Services are very balanced with 65% being monthly accounting and advisory services and 35% being derived from tax planning and tax return preparation. Average of 20% Annual Growth over the last 5 Years. Cash flow is 30-40% of gross and there are systems in place to improve this year-over-year.

Asking Price: $2,150,000
Cash Flow: $458,418
Price Multiple: 4.7x
Revenue: $918,849
Employees: 6
This is one of a kind and leader in this segment on the local and international market specialized in Business advisor, Consulting and Accounting. Very steady incomes with a portfolio around 300 recurring clients that even during the Covid pandemic it is keeping its stable revenues.

We make selling accounting practices easy and lucrative

At Next Bridge Advisors, we sell accounting firms and other professional services firms anywhere in the United States.

Having been established for 13 years, we have built a network of 28,000 buyers and a unique combination of expertise in the finance, marketing, structuring, and dispute prevention aspects of business sales.  

Email us at or learn how to maximize your earnings from selling an accountancy practice.