CPA firm M&A is accelerating across Texas. How accounting practices are valued, what buyers pay, and how to position your firm for a sale you'll feel good about.
A book of business is not an asset. Not yet.
It is a relationship. It lives inside someone's head. It picks up the phone when a specific person calls. The moment that person is gone, you find out very quickly whether what you built is a business or just a very loyal following.
I have seen a partner walk into a sale process absolutely certain he was going to hand off 120 client relationships in 30 days and move to the beach. Clients have opinions about that. Some of those clients had worked with the same partner for 20 years and were "definitely not going anywhere." Until he left. And then they had options. And they exercised them.
CPA firm M&A has been one of the most active deal categories in professional services for the past three years. Private equity is paying serious multiples for accounting practices with recurring client bases. But the structural risks in these deals, partner transition risk, client relationship portability, earn-out mechanics, are different from almost every other business sale. Here is what actually drives valuation and what you can do about it.
Two methods are common, and which applies depends on firm size and revenue profile.
For practices below $2M in revenue, revenue multiples are frequently used: 0.8x–1.4x gross revenue for firms with strong recurring client retention. A tax and accounting practice doing $1.2M in revenue with 90% client retention and a stable staff might be valued at $1M–$1.5M on a revenue basis.
For practices above $2M, EBITDA multiples are more common: typically 4x–7x, with premium paid for firms with strong recurring advisory revenue, industry specialization, or positioning in high-growth markets. A $3M revenue practice generating $750K in owner discretionary earnings in a growing suburban DFW market could trade at 5x–6x, a $3.75M–$4.5M outcome.
Recurring revenue quality. Tax preparation clients who have returned for ten or more years are worth more than one-off audit or advisory projects. Monthly accounting and fractional CFO engagements on annual contracts are worth the most. They provide cash flow visibility that buyers can model with real confidence.
Client concentration. No single client above 10–15% of revenue is the standard threshold buyers use. A practice where 30% of revenue comes from one long-term client has real transition risk that gets priced directly into the offer. Every time.
Staff depth. Partners and managers who handle client relationships independently, not just the founding partner. A firm where every client calls the founder personally is not the same business as one where three managers each own their client relationships outright. One of those firms needs an earn-out. The other does not.
Technology. Cloud-based platforms, QuickBooks Online, Xero, NetSuite, along with workflow management tools, signal operational maturity. Paper files and desktop software signal transition work for the buyer. That work gets priced into the offer.
Industry specialization. Accounting firms with deep expertise in contractor accounting, healthcare billing, or real estate fund work command premium multiples over generalist practices. If your firm has a niche, it is a genuine competitive asset in a sale process. Name it clearly.
The most consistent challenge in accounting firm transactions is client relationship portability. If 80% of your clients only trust the founding partner, a buyer is acquiring goodwill that may not fully transfer. Buyers know this. It is why PE buyers structure earn-outs in accounting deals, seller compensation tied to revenue retention over 12–24 months post-close.
Transitions that unfold over two to three years command better terms than abrupt departures. This is not a coincidence. It is the market pricing in the difference between a managed handoff and a hope.
If you are planning to sell in two to four years, the most valuable thing you can do right now is start transitioning client relationships to your managers and senior staff. Not just technically, introductions and context, but relationally. If clients trust your team independent of you, transition risk drops and the earn-out requirement shrinks with it.
DFW has a significant concentration of small-to-mid accounting firms serving the construction, healthcare, and professional services sectors. Firms with industry-specific expertise, contractor accounting, healthcare billing, real estate fund accounting, are more valuable than generalist practices and are drawing active interest from PE-backed consolidators.
Plano, Frisco, McKinney, Allen. These suburbs have a high density of owner-operated businesses that rely on accounting firms for tax, compliance, and advisory work. Firms embedded in these communities have client bases that are geographically stable and often multi-generational. That is a real asset. Document it that way.
Most CPA and accounting practices qualify for SBA 7(a) acquisition financing. The SBA goodwill cap is a relevant consideration for larger practices. Deals above certain enterprise values may require supplemental private credit to complete the capital structure. We work with private credit providers who know how to bridge gaps where SBA alone does not cover the full acquisition.
Berkman Woods acquires professional services firms including CPA and accounting practices in Texas and the Southwest. We understand the transition dynamics and structure deals that work for owners who care about what happens to their clients and staff after close. If you want a confidential conversation about what your firm is worth, reach out directly.
Related: Professional Services · For Business Owners
