Top 5 Variables in Valuing Accounting Firms under $2,000,000 in an External Sale

While most professionals will focus on the multiple when valuing an accounting firm, the multiple is the effect.  We need to understand the cause. There are 5 main variables that impact how you value a firm.

1)         Cash up front; if any

2)         The profitability of the deal for the buyer

3)         The duration of a retention period if any. This refers to whether or not post retirement; the purchase price is adjusted based on client retention

4)         The length of the payout period

5)         The multiple

Acquisition Readiness Webinar

Please join us for a Free webinar on Acquisition Readiness:


Speaker: Lon Goforth, Managing Director Transition Advisors, LLC
Date: Wednesday, December 14, 2011
Time: 2:00 to 3:00 pm EST

Internal Succession Webinar

Please join us for a Free Webinar on Internal Succession

Speaker: Terrence E. Putney, CPA, CEO Transition Advisors, LLC

Date: Tuesday, December 13, 2011

Time: 2:00pm to 3:00pm EST

What Are The Trends In M & A Of Accounting Firms

Is it a seller’s market, or a buyer’s market? The answer is yes to both questions, depending on where you are located and how large your firm is.

Billing Rates And What Do They Mean In A Merger and Acquisition

One of the key things firms tend to review when valuing a firm in an acquisition or assessing aspects of a merger is the billing rates the firm charges for their services. While this is a critically important thing, simply looking at a chart of what each team member’s billing rate is nothing more than a starting place, clearly not where it ends as it relates to billing rates.

You May Be Value Billing and Don't Know It

Our CEO, Terry Putney, caught up with CPA Trandlines to discuss how you may be value billing and don't know it.