Accounting Practice Purchase Agreement

You should also give up service in the wrong customers. You know who they are — those who pay late, create problems and are in need or demanding. You don`t need any extra headaches when selling an accounting firm. Selling an accounting practice can be scary for small businesses. They`re probably concerned about what`s going to happen when the word comes out. You may lose important customers or some of the employees you rely on so much. These concerns are usually in your head. You can limit potential damage by communicating effectively. It works so much better if you have a structured process. Then you can communicate to the main players the sales plans and progress at the corresponding time. If you hire an experienced business broker or professional consultant to assist with the sale, make sure that he or she follows good practice confidentiality procedures. For example, a broker or business advisor should never pass on a seller`s name or financial information to a potential buyer without first obtaining a signed confidentiality agreement.

If the broker or advisor`s agreement is duly developed, it protects the seller as a third-party beneficiary when it does not identify the seller. Once a potential buyer has signed this agreement, the broker or advisor should provide the seller`s information in published form, without any identifying information. Next, the broker or advisor should have a full interview with the buyer to determine the buyer`s interest and determine whether that buyer meets all the seller`s qualifications and criteria. If you don`t avoid the following risks in your efforts to sell a CPA practice, it can be disastrous for your business as well as for your financial future. Scenarios that resemble the next fictional narrative are far too common. Conversely, conditional price agreements are often much more difficult to document in an agreement, not least because they refer to the way and when the final price is calculated. Everything should be formulated in depth. For example, how is work-in-process treated? What about the new customers brought in by the buyer? 1. The key to achieving with the non-competition agreement is to prevent the seller from serving customers sold to practice. The non-compete agreement should refer to a complete list of all customers sold and all customers held by the seller (if any). The seller should not be able to serve or offer company customers regardless of the distance. The agreement should be prepared by a lawyer and should, but should not be limited to, contain the following confidentiality provisions: Fortunately, a seller can take counter-measures to avoid such a devastating and total disaster if he continues the sale of an accounting practice.

This article examines some proven strategies and practices that circumvent each of these potential risks in the marketing and negotiation process. While this article focuses on the sale of accounting firms, the board applies to the sale of many other types of businesses and can help achieve positive results in countless sectors and situations. Identifying the right type of buyer When selling an accounting practice, part of the payment is related to the retention of the customer. If too many customers go within 12 months of billing, you will receive less money. From our experience, the lion`s share of firms sells for between 0.9 and 1.3 times gross costs. Remember that most of Poe Group Advisors` accounting practices are sold at a fixed price at closing. We devote a section to the conditions below, but unfortunately for agreements with conditional conditions, much of the value of the exercise can be lost due to poor transitions and poor service after closure. Imagine that you are about to retire and are preparing to sell an accounting firm that claimed 35 years of “blood, sweat and tears” and is a very successful and profitable operation.