Staffing for Canadian CPA Firms

Let us help you transition your practice…

We provide professional staffing solutions for CPA firms and their small business
clients. We have more than 7 years of successful experience collaborating with
distributed teams in British Columbia and the Philippines. We provide the tools,
expertise and training that make outsourcing seamless and effective for our clients.
A 2017 CPA Canada study found that only 34% of CPAs are under 40. So how does succession planning work if you’re looking to retire and there is no one to take your place?
Timing is another consideration. Baby boomers are nearing retirement at the same time. If you’re planning to sell your practice you’ll have to compete with other practitioners who also want to sell.

How Much Do Small Firms Bill?

It’s important to know how your firm stacks up against your competitors, particularly if you are relying on selling your practice to generate some of your retirement nest egg.

How Much is a Canadian accounting firm currently selling for?

“We hear a lot in the news about the mid-tier and large rm acquisitions and mergers. What about the sale and merger of small firms? Within the last six months, we at Clearline Consulting have assisted in the closing of six deals in B.C. Compensation ranged from $0.375 to $1.00 per dollar of billings.” – Bridget Noonan June 2018

This is a very signicant range and if you go in with a preconception that all firms are worth $1.00 paid over three years based on retention you are likely to be disappointed. Here are a few factors that contributed to the signicant range in purchase prices:

  • Size of client block
  • Staffing
  • Type of engagements (assurance, compilation, bookkeeping)
  • File quality, documentation and program used
  • Additional overhead assumed or to transition clients to current structure
  • Ongoing compensation for retiring practitioner
  • Timing of transition and ultimate exit of retiring practitioner
  • Risk of retention and inclusion/exclusion of upside potential
  • Financing

Note that I have not categorized these factors by the impact on purchase price, as each may increase or decrease the desirability depending on the acquirer. So if you are looking for $1.00+ for your practice, you will need to find the acquirer who likes the full package.

In most circumstances it is the office location, the type of clients or your staff that are the most valuable asset you are transitioning. The purchase price may be attached to these rather than the retention of your full client listing.

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