How to buy an accounting firm: from first search to year one

If you want to buy an accounting firm, the first thing to accept is that you cannot buy clients. ICAEW’s helpsheet on buying and selling fees puts it plainly: clients have the right to choose their accountant, and what changes hands is the right to an introduction and a recommendation.

Every stage below answers one question: how many of these clients will still be here in two years? It covers Australia, the US and the UK, as at September 2026.

Three kinds of deal look similar and behave very differently.

• A block of fees. A seller hands over a set of clients, often on retirement or to shed work. You get revenue with no premises and usually no staff, so your team absorbs the work from day one.
• A whole practice. Clients, staff, systems, lease and liabilities. More to check, more to integrate, and you inherit people who already know the clients, which is the best retention tool you can buy.
• Capacity or capability. Sometimes the real target is a team, a specialism or a second location. Price it knowing that asset can walk out the door.

Write down, before you look at a single listing, the client types you want, the services you can deliver well, the region you can serve and the most you can absorb without breaking your own firm.

Most practices change hands through four routes.

• Specialist brokers. They run a process, prepare an information pack and screen buyers. Ask how they are paid and by whom, because it tells you whose interest they represent.
• Networks and associations. Networks, alliances and professional body communities are where many sole practitioners first mention retirement.
• Direct approaches. Writing to owners who match your list. Slow, but some practices change hands without ever being listed.
• Marketplaces. The Firm runs one at thefirm.media/firms, where a buyer can post what they are looking to acquire and sellers who match can make contact. It is free to list and is one channel among several.

Whichever route you use, expect to sign a confidentiality agreement before you see anything that identifies the firm or its clients.

A short screen kills most opportunities before you spend on advisers. Ask for the fee base by client (anonymised), the split by service line, three years of revenue, headcount and roles, and the seller’s reason for selling and timeline.

A short screen kills most opportunities before you spend on advisers.

Then ask yourself four questions. Do these clients look like the ones I already serve well? Can I deliver this work with my systems and people? Will the seller stay long enough to introduce me? And would I buy this firm if I had to fund it entirely from its own cash flow? For a calibration point on seller expectations, why most sellers overestimate their firm’s value is worth reading first, and The Firm’s guide to what an accounting firm is worth sets out the factors buyers weigh.

Diligence on a practice is mostly diligence on relationships. These areas decide whether the revenue survives the handover.

Area	What to check
Client concentration	Share of revenue from the top 10 clients, and any single client or family group you cannot afford to lose.
Fee quality	Write-offs, debtor days, how often fees were last reviewed, and clients who are priced well below the work they take.
Recurring vs one-off	Annual compliance and monthly work versus projects that will not repeat. One-off revenue inflates a fee base.
WIP and debtors	Ageing of both, and whether they are in the deal or settled separately from goodwill.
Staff and key-person risk	Who holds each client relationship, notice periods, restraints, and whether the key people have been told.
Software and data access	Which ledgers clients use (Xero, MYOB, QuickBooks Online), the practice system (Xero Practice Manager, FYI, Karbon or another), who owns the subscriptions and whether data can be exported cleanly.
Engagement letters and consent	Current signed engagement letters for each client, and how client consent to transfer records will be obtained.
Registrations and compliance	Tax agent registration, professional body membership, AML/CTF standing, professional indemnity history and any complaints or regulator contact.

The confidentiality rules shape what you can see

In Australia, the Tax Practitioners Board says a seller must not disclose client information to a buyer without the client’s consent or a legal duty to do so. It also expects client records, including proof-of-identity records, to transfer with a practice, and says a buyer does not have to repeat identity checks for every acquired client on day one. Expect anonymised data until consent is in place.

In the US, the AICPA’s interpretation on transferring files when a practice is sold (ET 1.400.205) requires the seller to request each client’s consent in writing, with consent presumed if the client does not respond within 90 days. Tax preparers also have Section 7216 to work through, so involve counsel early.

In the UK, ICAEW’s helpsheet points to data protection law, notes that each firm must do its own anti-money laundering customer due diligence (a buyer may rely on the seller’s with the seller’s written consent) and says a selling member needs at least 24 months of professional indemnity run-off cover. It advises buyers not to take on liability for work done before the sale.

AML/CTF in Australia from 1 July 2026

Australian accountants who provide designated services came under the AML/CTF regime on 1 July 2026, with enrolment due by 29 July 2026, according to CPA Australia’s summary of the reforms. The designated services include assisting with the purchase or sale of a company and creating or restructuring entities. If the target firm provides those services, ask whether it has enrolled, what its AML/CTF program looks like and what customer due diligence records exist. Check the current position with AUSTRAC directly.

Structure matters more than the headline number, because it decides who carries the retention risk. ICAEW notes that the value of a block of clients is usually worked out from the fees or profits the clients generate, with a multiple applied. Published multiples vary by country, size and year; treat any figure as one source’s view, not a price to pay.

Structure matters more than the headline number, because it decides who carries the retention risk.

• Retention-based pricing. Part of the price is fixed only after a set period, based on the fees actually retained. It ties what you pay to what you keep.
• Clawback. The price falls if clients leave or fees come in below expectation. ICAEW says a cap on the maximum clawback should be agreed, and that clawback gives the seller a reason to help the handover succeed.
• Earn-outs and deferred payments. Instalments over time, sometimes tied to revenue or profit targets. Define the measurement precisely; disputes live in the definitions.
• Vendor finance. The seller accepts part of the price over time. It reduces the cash you need and keeps the seller invested in the outcome.
• Bank lending. Some lenders have specific practice-acquisition products. In the US, the SBA’s 7(a) program lists changes of ownership as an eligible use, with a maximum loan of $5 million as at September 2026.

Also agree what happens if the seller keeps acting for clients who decline to move. ICAEW suggests the agreement may need a compensation formula for that case. For the seller’s side of the negotiation, see what buyers will pay for and what they won’t.

The announcement is the biggest retention moment in the deal. Staff should hear before clients, and both should hear it from the seller. A letter is enough for some clients; the top of the book deserves a call or a meeting.

The announcement is the biggest retention moment in the deal.

In Australia, businesses with an ABN other than sole traders must nominate their new agent in Online services for business before the agent can add them, and the agent cannot do it for them. Build that into your client communication, or lodgements stall. On staff, Australia’s Fair Work Ombudsman explains how service and leave work on a transfer of business, and in the UK, TUPE transfers employees on their existing terms with continuity of employment.

In the first 90 days, keep every client you can and change as little as clients can see. Meet the top clients, keep their contact person where possible, deliver the next job on time, and hold off on repricing or new systems until the relationship is yours.

Behind the scenes, migrate data, reconcile WIP and debtors against the deal terms, set up access to every client ledger, and complete any identity or AML checks your own obligations require. Track retention weekly against the numbers in the sale agreement.

Across the first year, move clients onto your engagement letters and service model, review pricing client by client, and decide on the clients who do not fit. Our guide to integrating an accounting firm after an acquisition covers the sequencing.

This is general information, not legal, tax or financial advice. Get advice from a lawyer and accountant who act on practice sales in your jurisdiction before you sign anything.

Is it better to buy a block of fees or a whole practice for a first acquisition?

A block of fees is simpler to integrate and cheaper to diligence, but it only works if your team has spare capacity today. A whole practice takes more effort, but its staff often hold the relationships that keep clients.

Can I contact the seller’s clients during due diligence?

Generally not until the seller agrees and client consent is sorted. In Australia and the UK confidentiality duties limit what the seller can share, and in the US the AICPA consent process governs file transfers. Meet key clients alongside the seller once consent and the deal terms allow.

How long should the seller stay on after completion?

Long enough to introduce you personally to the clients who matter most and to see through at least one full compliance cycle. Tie part of the price to that involvement so the seller stays engaged.

Do I need to redo identity checks on every client I acquire?

The TPB says an Australian buyer does not have to repeat proof-of-identity checks for each acquired client immediately, though records should transfer and checks happen over time. AML obligations are separate: your own program decides what you need, and in the UK reliance on the seller’s checks needs written consent.

What usually goes wrong after an accounting firm acquisition?

The risk that matters most is client losses after the handover, and changes clients notice too early make it worse: a new contact person, a price rise or a new portal in the first months. Protect the relationship first and change systems later.