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The Complete Guide to M&A of CPA Firms
By Cindy Ragan
CVA, Economist
Market Trends
Market Trends in CPA & Accounting Practices
Recent mergers and acquisitions in CPA firms are increasing at a record pace. National and regional firms are actively acquiring accounting practices, driven by strong economic growth and industry expansion in South Florida.
Industry Benchmarks & Trends
The accounting industry by the numbers
Projected industry revenue by 2025, including $8.7B in consulting revenue
Employees in 2025; the workforce has declined ~10% since 2019
CPA firms operating in roughly 55,000 locations across the US
Average revenue per employee; average pay is $91K
Projected job growth through 2033 — higher than the average for all occupations
Of CPA firms have fewer than 20 employees — smaller firms still rule
The Accounting Industry By The Numbers
Recent Industry Trends in M&A of CPA Firms
- National and Regional Firms are buying accounting practices at a record pace due to above average growth in population and industry in South Florida relative to the rest of the country — aerospace, technology, medical, professional services, etc.
- The majority of large firms need a South Florida presence since they all have at least some larger clients with offices or headquarters here, and of course, they all have or want a home here.
- It is estimated that 60% of all Partners and Sole Practitioners are over the age of 60 and will be over 65 in the next 5 years.
- CPAs are working longer than ever. 65% of those surveyed said they will work past the age of 70 — many lost a majority of their retirement in the 2008–2009 stock crash.
- The day of the Sole Practitioner is nearing its end; its inefficiency is characterized by an endless cycle of too much work, too little growth, too little pay, yielding the proverbial "death at one's desk"!
Why CPAs Consolidate
Two motives: gain resources & gain market share.
Two motives; one to “GAIN MORE RESOURCES” the other “GAIN MARKET SHARE” — It is simply too slow and costly to grow organically. Accounting practice sales, or merging practices, is the most cost efficient and expedient strategy to expanding or exiting your practice for countless reasons.
Key Benefits
Why M&A pays off — instantly.
- Adds clients, staff, services & geographic locations instantly & pays for itself
- Economies of scale yield increased cash flow, profitability & value instantly
- Attracts superior professional talent
- Attracts larger clients — larger firms get larger clients
- Creates a broader career path for existing staff & partners
- Allows partner(s) to focus/specialize more on their talents
- Allows for multiple layers of management while sharing administrative & management responsibilities
- Secures an Exit Strategy for Partners, long-term
- Buys-out Retiring Partners, short-term
- Secures an Exit Strategy for Partners, long-term
Challenges Facing Firms
Smaller Firms Can't Compete, Nor Thrive.
- Not enough time nor cash flow to expand organically at any significant rate
- Cannot attract, nor maintain, young CPAs — no partnership track, can't compete with regional & national firms for talent
- Cannot afford middle management needed for growth
- Owners not billing enough, doing too much admin
- Profitability ratio below market
- Can't offer other needed services to clients
- No time for needed consulting nor quality customer service
- No internal succession plan
Partner Retirement Wave
CPA Firm Sales Pay for Themselves.
- With organic growth, investments in marketing, advertising, and networking are too slow and costly, and the acquisition cost of new clients is impossible to determine.
- Cash flow from M&A Transactions cover Debt Service, Costs and the Down Payment, otherwise not a good deal.
- Cash flow comes from Economies of Scale and Partners retiring or slowing down.
Opportunities for Buyers
M&A Benefits to Buyers.
- Instant scale — clients, staff, services and geography in a single transaction
- Established cash flow with predictable recurring revenue
- Cross-sell opportunities into advisory, financial planning and outsourced services
- Talent acquisition — bring in seasoned CPAs in a tight labor market
- Geographic expansion into high-growth Florida markets
- Economies of scale fall directly to the bottom line
Recent CPA consolidation trends
CPA Firm M&A Trends
Recent mergers and acquisitions in CPA firms are increasing at a record pace. National and regional firms are actively acquiring accounting practices, driven by strong economic growth and industry expansion in South Florida.
Key contributing industries include:
- Aerospace
- Technology
- Medical
- Professional services
This regional advantage has made South Florida one of the most active CPA acquisition markets in the country.
Regional market advantage
Large CPA firms increasingly require a South Florida presence due to:
- Existing client bases with local offices
- Corporate headquarters relocating to the region
- Personal relocation preferences of business owners and partners
Partner retirement wave
Industry data shows a major demographic shift:
- Around 60% of partners and sole practitioners are over age 60
- Most will be over 65 within the next 5 years
- Many CPAs are working longer due to financial recovery concerns after the 2008–2009 crash
Changing Career Patterns
CPAs are working longer than ever before.
- 65% of CPAs expect to work beyond age 70
- Retirement timelines are being delayed
- Succession planning is becoming more urgent than ever
End of Sole Practice
The era of the sole practitioner is gradually ending due to structural inefficiencies.
- Excess workload with limited growth
- Low profitability despite high effort
- Lack of scalability
Key consolidation drivers
Why CPAs Consolidate
CPA firms merge or acquire practices for two main reasons:
- Gain more resources
- Gain market share
Organic growth is often too slow and expensive, making acquisition the most efficient strategy for expansion or exit.
Key Benefits of Consolidation
Merging or acquiring CPA practices provides immediate advantages, including:
- Instant addition of clients, staff, services, and locations
- Improved cash flow, profitability, and firm valuation
- Access to higher-quality professional talent
- Ability to attract larger clients
- Expanded career paths for staff and partners
- Increased specialization opportunities for partners
- Shared administrative and management responsibilities
- Strong long-term exit strategy for retiring partners
- Short-term buyouts for retiring owners
Challenges Facing Smaller Firms
Smaller CPA firms face increasing difficulty competing in today’s market due to:
- Limited time and cash flow for organic growth
- Difficulty attracting and retaining young CPAs
- Lack of partnership track or career progression
- Inability to afford middle management
- Owners overextended with administrative and client work
- Lower profitability compared to larger firms
- Limited service offerings
- No structured succession plan
CPA Firm Sales & Value Creation
CPA firm acquisitions often effectively “pay for themselves” when properly structured.
- Faster growth compared to marketing or organic expansion
- Cash flow from acquired firms covering debt service and transaction costs
- Economies of scale improving overall profitability
- Retirement or reduction of partner compensation over time
Market Closing Insight
The CPA industry is currently undergoing a major consolidation phase driven by:
- Demographic shifts in firm ownership
- Strong regional market growth
- Increasing demand from national and regional buyers
Owners who plan early are consistently in a stronger position to:
- Maximize firm valuation
- Reduce operational and transition risks
- Secure more favorable exit opportunities
Planning Ahead Matters
Strategic Planning & Exit Insight
Call us directly to discuss your succession or expansion plans and explore how we can support you with live consulting and strategic guidance.
It is never too early to start planning your exit strategy or long-term business growth roadmap. Early preparation allows CPA firm owners to maximize value and reduce transition risk.
The Complete Guide to M&A of CPA Firms
By Cindy Ragan, CVA
It is never too early…
Call us directly to chat about your succession or expansion plans, and how we can help you. It’s never too early to begin planning your exit or business development plans.