Sellers' guide · Updated
What is my accounting firm worth?
Every broker will give you a multiple. Almost none will tell you why yours is lower than the one they quoted — or what you could have changed two years ago. This is the sellers' side of that conversation, drawn from the people who have actually done it.
Six questions, no email Find out where your firm sits, and what you can still change Work through the six factors →The honest starting point
There is no single multiple for an accounting practice, and anyone quoting one without asking about your book is selling something. Firms are valued either on a multiple of recurring fees or a multiple of adjusted earnings, and the spread between a well-prepared practice and a poorly-prepared one of identical size is wide enough to dwarf any negotiating you will do at the table.
Which means the useful question is not what is the multiple. It is what moves my multiple, and how much of that can I still change before I go to market.
So this page doesn't give you a number. It gives you the six things buyers price on, your position on each, and which of them you can still move — because that is the only part of the answer you have any control over.
Six factors, weighted the way buyers weight them
Answer honestly rather than optimistically — the most common finding across our reporting is that owners price on effort and history while buyers price on transferable future cash flow. Nothing is stored and nothing is sent. If you want the result by email, ask for it under the result: we keep your address, your consent and the result, never your answers.
Recurring revenue
Predictable compliance and advisory retainers are what a buyer is really purchasing. One-off project work is discounted heavily because it does not survive the transition, and in some deals it is excluded from the valuation base entirely.
Client concentration
A book where the top client is 20% of fees carries obvious risk. Buyers either discount for it or structure more of the price into an earnout, which moves the risk back onto you.
Owner dependence
The single biggest lever most sellers can still move. If the relationships, the pricing decisions and the technical review all run through you, the buyer is purchasing a job rather than a firm — and pricing it accordingly.
Systems and data hygiene
A firm on a coherent, documented stack transitions faster and diligences cleaner. Messy workpapers and undocumented processes do not just slow the deal, they give the buyer material to negotiate with.
Staff who will stay
Buyers are usually buying capacity as much as clients. A team that leaves at completion destroys much of what was purchased, which is why retention terms often shape the structure more than the headline number.
Fee quality
Underpriced clients you have carried for a decade are not a hidden asset. A buyer sees the work required to reprice them and the churn risk that repricing creates.
What this isn't
A valuation, and not a multiple. We won't quote you a figure without seeing your book, because that is exactly the thing this guide warns you about. A broker or a valuer works from your actual numbers; this works out which questions they'll press on.
The four mistakes that cost sellers most
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Confusing the headline number with what you receive
Very few practice sales are cash at completion. Earnouts, retention clawbacks and deferred instalments mean the advertised multiple and the money that reaches you can differ substantially.
Model the downside case, not the brochure
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Starting the conversation twelve months too late
Most of what drives value — reducing owner dependence, fixing concentration, repricing the bottom of the book — takes one to three years. A seller who starts preparing when they decide to sell has already given away the upside.
The work precedes the decision
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Overestimating what the firm is worth
The most common finding across our reporting. Owners price on effort and history; buyers price on transferable future cash flow and risk. Those two numbers are rarely close, and the gap is where most deals quietly die.
Price the book a buyer sees
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Treating integration as the buyer’s problem
If your consideration is partly deferred or tied to retention, integration is very much your problem — a bad first ninety days after completion can cost you the part of the price you had already mentally spent.
Deferred price means shared risk
Our interview series with the buyers, sellers and advisers behind real accounting-firm transactions — what the deal actually looked like, not the press release.
Our M&A reporting
- Integration How to integrate an accounting firm after an acquisition Trent McLaren
- Building to sell Building a firm you can sell (or step away from) The Firm
- Private equity Is private equity the only path for accountancy firms to survive? Scott Heath
- Client relationships Why Tyler Caskey refuses to sell himself on LinkedIn (and still lands million-dollar clients) Tyler Caskey
- Overestimating value Would you buy your own accounting firm? Why most sellers overestimate their firm’s value The Firm
- Doing it alone Navigating M&A as an independent accounting firm Nigel Adams
- UK vs US A cross-atlantic perspective on M&A in accounting: key differences between the UK and USA Allan Koltin
- Independent firms Independent firms vs private equity: Will small practices survive the accounting revolution? James Gosling
When you're ready
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Selling an accounting firm, answered
What is my accounting firm worth?
- Accounting practices are usually valued either as a multiple of recurring fees or as a multiple of adjusted earnings, and the range is wide because the inputs vary enormously. What moves the number is the quality of the revenue rather than its size: how much is genuinely recurring, how concentrated the client base is, how dependent the firm is on the owner, and whether the team will stay. Two firms with identical fee income can be valued very differently on those four factors alone. Any figure quoted without reference to them is a guess.
How long does it take to sell an accounting practice?
- From going to market to completion is commonly six to twelve months, but that understates it. The work that actually determines the price — reducing owner dependence, fixing client concentration, repricing underpriced work, documenting processes — takes one to three years before that. Sellers who start preparing at the point they decide to sell have usually already forfeited the upside.
What do buyers of accounting firms actually pay for?
- Transferable future cash flow, and little else. That means recurring fees that survive a change of owner, a client base that is not concentrated in a few relationships, staff who will stay, and systems that let the work continue without the outgoing principal. Goodwill built on personal relationships is the hardest thing to transfer and is discounted accordingly.
Should I sell to a competitor, a consolidator or my own team?
- Each trades price against certainty and legacy. Consolidators and private-equity-backed buyers often pay the most but structure heavily around earnouts and retention, so more of the price is at risk. A local competitor may pay less but complete faster with fewer conditions. An internal succession or management buyout usually pays least in headline terms and takes longest to fund, but carries the least disruption for clients and staff. The right answer depends on whether you are optimising for the number, the timeline, or what happens to the people.
Is now a good time to sell an accounting firm?
- Demand for accounting practices has been strong, driven by consolidation and by buyers seeking recurring revenue and capacity in a tight labour market. That supports pricing but does not change the fundamentals: a firm that is owner-dependent, concentrated or under-priced will be discounted in any market. Firm readiness moves your number far more than market timing does.