All Articles
Two-Stage Deals
Originally published in the Journal of Accountancy by the AICPA March 2006
A sequenced transition can smooth a firm’s ownership transfer.
Price Equals Value Plus Terms
Originally published in the Journal of Accountancy by the AICPA December 2004
You've worked hard for many years to build equity in your practice. Now you want to sell. Business valuation (BV) and practice succession procedures will help you prepare your practice or share of it for acquisition, but arriving at a final price for your equity will depend, in part, on the art of the deal.
Succession Planning: What Are the Roadblocks in Most Mergers? Is Anything "Easy"?
Originally published in the June 2010 CPA Practice Managment Forum, a monthly journal published by CCH, a Wolters Kluwer business. After being involved with hundreds of mergers and acquisitions of accounting firms over the past 20 years, we have found a trend: the bumps in the road are the same whether the mergers are between firms of equals or a smaller firm is merging into a larger one. Conversely, some surprising things are not as hard to overcome as one might think.
Mergers & Acquisitions of CPA Firms: Understanding the Roadblocks To Successful Deals (Part 1 of 2)
Originally published in the Journal of Accountancy, March 2009. Despite the best intentions of all involved parties, some CPA firm mergers and acquisitions are not as successful as originally planned; indeed, some end as failures. When viewed in perfect hindsight, it often seems that simple common sense, or lack thereof, was the reason for the success or failure of a deal. Unfortunately, there is no specific formula for structuring a perfect deal, but a good understanding of the potential hazards relating to the variables involved and planning for the unexpected can help your firm prepare a better deal structure and business plan.
Keeping It Together (Part 2 of 2)
Originally published in the Journal of Accountancy, April 2009. Retirement, health issues for an owner, the desire to grow—all
of these are reasons firms engage in mergers or acquisitions. Most
firms decide to merge or acquire only after considerable analysis
of financial and professional outcomes. In last months issue we gave general
advice for ensuring a merger or acquisition goes smoothly. But a firm’s
ability to make a successful deal depends not only on deal structure
and due diligence but also on the successor firm’s ability to retain clients
and staff. Unfortunately, an agreement between the partners of two firms
to combine has nothing to do with whether staff and clients stay or leave.
What Will a Bad Economy Mean for CPA Firm M&A?
Originally published in the AICPA SMALL FIRM SOLUTIONS, Winter 2009.
Every news story reinforces the idea that we are in economically challenging times. How will these turbulent times affect the mergers and acquisitions market among CPA firms? What other practice management considerations could it raise? While no one knows with certainty what will happen down the road, a look at the past sometimes can give you a sneak peek into the future.
Succession Planning--Valuing Partner Equity in Larger Firms
Originally published in the CPA Practice Management Forum, December 2009, Succession planning is the foundation that creates a successful transition of client relationships. This article discusses how to capture and measure the value of the firm once the succession has commenced.
Replacing Retiring Partners
Originally published in The CPA Journal, October 2009
The gap between accounting firm owners’ need for successors and the available pool of partner-level talent will continue to widen due to demographic changes as baby boomers age and retire to be replaced by a smaller cohort. This is probably the single most important long-term issue facing small and medium-sized firms. Many of the mergers occurring in today’s market are driven by firms’ inability to find successors for their partners internally.
Succession Planning: The Available Strategies and How They work
Originally published in the CPA PRACTICE MANAGEMENT FORUM, a monthly journal published by CCH, a Wolters Kluwer business, October 2009.
With the aging of the Baby Boomers, succession planning remains an integral part of looking to the future. This article discusses how to manage partner transition within the firm.
Short-Sighted Mistakes Made In Due Diligence
Originally published in AICPA Small Firm Solutions, Late Summer 2009
When valuing a business, historical data is a key concern, but proper due diligence also requires a strong focus on the future. A merged or acquired firm is a different entity from what it once was, and the effects of this transformation must be considered in sizing up any potential deal. Here are some examples in which data about the current firm don’t tell the entire story.
The Value of a Smooth Transition in Tough Times
Originally published in the AICPA SMALL FIRM SOLUTIONS, Spring 2009.
During a time of economic uncertainty, both buyers and sellers will be giving extra scrutiny to all aspects of a merger or acquisition. A key measure of a deal’s success is the percentage of clients retained after-wards. To plan for the highest level of retention possible, start by considering why you have your clients. Most are unaware of your competency level. They trust that you are knowledgeable and capable, but the key word is trust. You are their most trusted business adviser and this trust can be taken advantage of, in a professional and ethical way, and should not be feared.
Succession Planning for the Sole Practitioner
Originally published in the AICPA SMALL FIRM SOLUTIONS, Winter 2008. Effectively transitioning your client relationships to a successor firm should also maximize the value of your practice.
When Should a Small Practitioner Merge Into a Larger Firm?
Originally published in the AICPA SMALL FIRM SOLUTIONS, Fall 2008. If you ever wonder what you’re missing by staying small, here’s a review of the reasons for merging and the best way to handle a transition.
Valuing The Smaller Accounting Firm
Originally published in the AICPA SMALL FIRM SOLUTIONS, Summer 2008
For many smaller practitioners, their firm is one of their largest assets. They have worked for years to develop and nurture this practice and want to receive a reward for their sweat equity and loyalty. How do you value this assett?
The Case for Mergers in This Tough Economy
Many firms are wondering how the economy should impact a decision to go forward with M & A deals right now or in the near future.
Current Trends Surrounding M & A of Accounting Firms
Reprinted with permission from Inside Public Accounting December 2007
A look at how the market is changing and why to start planning succession earlier then in the past
Mergers of Accounting Practices
Originally published in Today’s CPA November/December 2007
The Whys/Why Nots/How/When and With Whom?
Untying the Knot: Planning for a De-Merger
Originally published in the Journal of Accountancy by the AICPA October 2007
Creating a de-merger plan
Succession Planning: Where Do You Stand?
Originally published in the AICPA SMALL FIRM SOLUTIONS, Summer 2007
When should you commence your Succession Plan
If the Shoe Fits
Originally published in Insight, the magazine of the Illinois CPA Society August 2007
Practice Continuation Agreements: how they work, who should have them.
Unique Approaches to Succession Planning for Accounting Practices
Originally published in Leaders Edge, the Michigan State Society of CPAs March/April 2007
An overview of the varying considerations in planning for an internal or external succession.
Understanding the Market for Accounting Firm Mergers and Acquisitions
Originally published in the MNCPA Footnote Dec06/Jan 07
What are the factors that are driving what seems to be an unprecedented level of activity in the accounting profession for mergers and acquisitions? How are deal structures being affected?
Succession Planning
Originally publishes in Florida CPA Today Nov/Dec 2006
You have devoted years to building your practice. With proper planning, you can maximize the value of your firm through a sale where everyone wins: you, your clients and the successor firm.
The Cull-out Sale: Partial Retention of a Practice
Originally published in The CPA Journal by the New York State Society of CPAs November 2006
Many professionals think of their transition to retirement in black-in-white terms. However, there are a plethora of ways to address succession that allow professionals to make a change in their organization and career short of the finality associated with an outright sale. One option is a cull-out sale.
Valuing and Merging Smaller Accounting Practices
Reprinted with permission from the CPA Leadership Report October 2006
Acquisitions of small accounting practices has become common recently. Small practices are also increasingly becoming purchasers. Know the reasons for increased activity, how deals are structured and what buyers should consider.
M&A Foretold
Reprinted courtesy of INSIGHT Magazine, the magazine of the Illinois CPA Society, August 2006
The need for succession security, client growth and staff talent continues to drive the desire for mergers and acquisitions.
Transition Plan - Transitioning Clients and Staff During a Merger or Acquisition
Originally published in MSCPA's The Asset July 2006
You’ve identified the firm you are going to buy, sell or merge with, worked out the terms of the deal, and know how you will operate after the closing. How do you transition clients and staff to maximize retention?
Mergers and Acquisitions
The questions you need to ask - the answers you need to know...
Reprinted with permission from the NATP TAXPRO Quarterly Journal Spring 2006
Lately there’s been a tremendous amount of news about the buying and selling of accounting and tax practices. Regardless of your intentions its important to examine valuation techniques and market evaluations. Here’s some M & A Q & A’s to consider.
Tax Considerations When Buying or Selling an Accounting Firm
Originally published in New Jersey CPA January/February 2006
Whether you are selling or buying an accounting firm, no proposal is truly complete until each party understands and agrees on the treatment of payments for tax purposes.
There's Still Time!
Reprinted with permission from Accounting Today Vol. 20 No. 2 Jan 30-Feb. 12 2006
Now may be the best time to sell – but it won’t always be a seller’s market.
Roles Of Partners, Equity And Compensation Stand Among The Top Considerations When Mergers Serve As Succession Solution
Reprinted with permission from Inside Public Accounting November 2005
Succession planning is one of the most urgent issues facing accounting firms today. While firms often look for internal solutions to succession, mergers and acquisitions are alternative solutions.
Succession Planning for Tax and Accounting Practices
Originally published in the EAJournal July-August 2005
As tax and accounting professionals, we advise and help our clients plan years before they retire or sell their businesses. Yet so many of us fail to take our own advice and wait too long to start the process of succession planning.
More Than Face Value
Originally published in Insight, the magazine of the Illinois CPA Society August 2005
Are you considering buying or selling your practice? Then you’ll need to understand the criteria for valuing the firm in today’s marketplace. It’s all about variables when it comes to valuing an accounting firm for merger or acquisition.
How to Assess an Acquisition Strategy to Start or Expand a Financial
Original manuscript as submitted and provides the basis for the article "Adding Financial Services to Your Practice" published by the CPA Wealth Provider supplement to Accounting Today April 2005
Either you have decided to offer financial services to your clients or you want to grow the talent pool of your existing financial services practice. Should you acquire a firm that already offers those services to accomplish that goal?
Succession Planning the Future is Now
Reprinted with permission from MACPA March 2005
You have devoted years to building a practice. With proper planning, you can maximize the value of this asset through a sale where everyone wins: the successor firm, your clients, and you.
Due Diligence Before Buying or Selling an Accounting Practice
Originally published in the CPA Journal by the New York State Society of CPAs February 2005
Many think that due diligence is the first step before negotiating the purchase or sale of a professional practice. This is not necessarily correct.
Succession Planning for Smaller Firms
Originally published in the Sum News by the Massachusetts Society of CPAs Summer 2004
When do I start the process? While we are constantly reminding our clients to plan for their retirement in advance, we frequently delay making our own succession plans. There are several key items that will dictate when to start the transition process.
Hourglass Effect
Originally published in Insight, the magazine of the Illinois CPA Society August 2004
With labor shortages looming, internal succession planning couldn't have come at a better time. Is your practice ready for internal succession?
Ready to Merge?
Originally published in Insight, the magazine of the Illinios CPA Society July 2003
That's the question facing many CPA practices...trust your instincts to find the right answer.
The Key to Successful Succession Planning
Originally published by TAXPRO Quarterly Journal Spring 2003
As tax professionals, we provide the guidance our clients need to plan for retirement. As in the old story "The Elves and the Shoemaker," it is amazing how often we neglect ourselves and fail to plan appropriately for our largest intangible asset, our practice.
Six Steps to Selling Your Practice
Originally published by TAXPRO Quarterly Journal Spring 2002
You worked long and hard. Finally, it's over. Another tax season is behind you. Like many of your colleagues, you're probably wondering what comes next...the following steps to selling your business should apply to almost all practices and hopefully supply you with more than just a starting point.
Considering a Merger? How's Your Ego?
Originally published in the Practicing CPA by the AICPA March 1999
CPAs planning for a successful future always consider and reconsider various growth opportunities, and never before in the history of the profession have there been so many of them available. One very popular method of expanding a firm is acquiring or merging with another CPA firm.
Make Your Merger/Acquisition Work
Originally published in the CPA Journal by the New York State Society of CPAs September 1997
Is your firm thinking about a merger or acquisition or maybe an acquisition disguised as a merger? Whichever it really is or whatever you want to call it, problems can arise for the parties on both sides of the transaction for any number of reasons...
Selling an Accounting Practice
Originally published in the CPA Journal by the New York State Society of CPAs August 1996
What do you have to contemplate when the time comes to sell your accounting practice? Among other things, the author discusses personal considerations, transition problems, how to choose a successor, and structuring the transfer.
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