What Regional CPA Firms Look for in Acquisition Targets and How to Position Your Practice for a Premium Sale

As consolidation within the accounting industry accelerates, many regional CPA firms are actively acquiring smaller practices to expand their client base, deepen niche expertise, and improve profitability. For firm owners considering retirement or a transition, understanding what buyers value—and how to align your practice accordingly—can make the difference between an average offer and a premium sale price.

What Buyers Look For in an Acquisition Target

1. Strong, Recurring Revenue Streams
   Regional CPA firms want practices with stable, recurring revenue. Firms with annual contracts, tax season retention, or ongoing advisory work are more attractive than practices relying heavily on one-off engagements.

2. Client Quality and Industry Niches
   Buyers are looking for clients in profitable industries, long-term relationships, and opportunities to cross-sell additional services. Niche practices (e.g., construction, dental, veterinary) often command higher multiples because of specialization and reduced competition.

3. Scalable, Efficient Operations
   A streamlined practice with digital workflows, and paperless processes integrates more smoothly into a regional firm’s existing infrastructure. Conversely, outdated technology or inefficient processes can drive down valuation.

4. Geographic Fit
   Regional firms typically look for practices in markets adjacent to or complementary to their existing footprint. Proximity to desirable client bases, or a strong reputation in a growing local economy, makes an acquisition more appealing.

5. Staff and Leadership Continuity
   Practices with trained staff who will stay on through the transition are highly valued. Turnover risk increases integration costs and can scare off buyers. Leadership willing to stay on for a defined transition period also reassures clients and staff.

6. Reputation and Client Satisfaction
   Buyers pay close attention to Google reviews, referral patterns, pricing and overall client loyalty. A practice with a strong reputation and minimal churn reassures acquirers that revenue will remain steady post-transaction.

How to Position Your Firm for a Premium Valuation

1. Clean Up Your Books and Billing
   Buyers want clear, accurate financials. Standardize billing practices, reduce write-offs, and demonstrate consistent collections. A healthy realization rate (billings vs. collections) signals operational strength.

2. Diversify Revenue and Reduce Client Concentration
   If one or two clients make up more than 20% of revenue, it’s a risk for buyers. Building a balanced client portfolio strengthens negotiating power.

3. Invest in Technology Before Selling
   Transitioning to cloud-based software, client portals, and modern communication tools reduces friction for a buyer and enhances perceived value.

4. Document Processes and Systems
   A practice that runs on standardized procedures rather than the owner’s institutional knowledge makes integration seamless and less dependent on one individual.

5. Retain and Incentivize Staff
   A younger, motivated team can ease the transition. Consider retention bonuses or clear career paths to encourage staff to remain through ownership changes.

6. Build a Strong Brand Presence
   A modern website, consistent marketing, and positive online reputation can set your practice apart. Buyers know a strong brand accelerates client retention and growth.

Final Thoughts

The market for accounting firm acquisitions is competitive, and buyers are becoming more selective. To maximize your firm’s value, think like a regional acquirer: focus on recurring revenue, client quality, technology, and staff stability. By preparing your practice well in advance of a sale, you not only make the transition smoother but also position yourself to command a premium price on the market.