National transaction benchmarks for accounting practice businesses.
Under $500K
Median revenue$231k
Median cash flow$96k
Median sale price$190k
Multiple range1.5x - 2.4x
$500K to $2M
Median revenue$794k
Median cash flow$322k
Median sale price$800k
Multiple range2.0x - 3.5x
Over $2M
Median revenue$2.40m
Median cash flow$705k
Median sale price$3m
Multiple range3.6x - 4.6x
A variety of factors can cause businesses to trade outside this range, including earnings quality, operational transferability, key-person risk, growth trajectory, and geography, so a listing priced above or below the typical multiple usually reflects real differences in the underlying business.
What to know about accounting practice acquisitions
Key diligence, valuation, financing, and transition considerations for buyers evaluating accounting practice acquisitions.
Client retention is the underwriting question
The standard assumption is 80–90% retention. Most accounting-practice sale terms include a retention provision: if the buyer loses more than a defined percentage of revenue in the first year, the purchase price is adjusted downward through clawback or an earnout. Sellers who refuse retention terms are signaling something either that they know their clients won't stay or that they don't think they'll be involved enough to help. Walk away from "as-is" deals unless the price is heavily discounted.
The seller's transition role determines outcomes
Buy the seller's calendar, not just the firm. The single biggest predictor of client retention is whether the seller stays involved for 6–18 months, makes warm introductions, and signs the engagement letters under the new firm. Practices where the seller disappears on day one lose clients fast. Practices where the seller phases out over a year keep them. Negotiate the seller's role in writing: hours per week, specific client meetings, how introductions happen, when the seller's name comes off the door.
Practice composition shifts the multiple
Tax-heavy versus bookkeeping-heavy is a real distinction. A practice that's 80% individual tax returns is seasonal — three months of intensity, nine months of slack. A practice that's 60% bookkeeping and 40% tax has steady monthly revenue but lower margins. Business-tax-and-advisory practices have the best economics: higher fees per client, year-round work, deeper relationships. The mix matters more to your day-to-day than the price.
Software ecosystem migration is a hidden cost
Audit the tech stack before close. If the seller runs everything on a decades-old desktop tax package and physical filing cabinets, your first two years include a software migration that will eat hundreds of hours and risk client confusion. If the practice is already on cloud platforms (QuickBooks Online, Drake or CCH cloud tax, a modern document portal), you can focus on growing the book. Ask for a tech stack inventory and budget for replacement of anything more than 5 years old.
CPA licensing rules vary by state
Check the ownership requirements for your state. Most states require a CPA practice to be majority-owned by licensed CPAs. If you're not a CPA, you can still buy in some structures, but you'll need a CPA partner or you'll need to convert the practice to a non-CPA-licensed bookkeeping or tax-prep entity (which limits what services you can offer and may trigger client departures). Verify your state's rules and the practice's licensing status before signing an LOI.
Staff retention is a separate negotiation
The senior accountants are the firm. Most clients have a primary relationship with a staff accountant, not with the owner. If that person leaves at close, you lose their clients. Identify the key staff before close, meet with them privately, and have retention bonuses ready — typically 25–50% of annual salary paid out over 18–24 months. Build the bonus pool into your purchase model; this is non-optional, not optional.
Frequently Asked Questions
Answers to common buyer questions for this market.
The traditional rule of thumb is 0.8x to 1.2x of annual gross revenue, with practices trading in the Tier 1 range (under $500K) for revenue under ~$500K and Tier 2 ($500K–$2M) for mid-sized practices. Higher-margin advisory-heavy practices can sell at multiples of SDE that imply higher gross-revenue multiples. The price isn't really a fixed number, it's a formula with a retention adjustment, so the headline number can swing 20% based on year-one client loss.
