The short answer: Buy an accounting firm on recurring revenue, not last year's tax rush. Expect to pay roughly 2.33× SDE (about 1.0× annual revenue), put ~10% down with an SBA 7(a) loan, and structure a retention-based earnout so price follows the clients who actually stay. You do not need to be a CPA to buy a bookkeeping/tax practice, you need a CPA only for attest work. The whole deal lives or dies on the client transition.
Why accounting firms are a first-timer's favorite
Accounting practices check nearly every box a lender and an owner-operator want. Revenue is recurring, monthly bookkeeping, quarterly filings, annual returns that renew like clockwork. There is virtually no inventory and no heavy equipment, so the purchase price is almost entirely goodwill and client relationships. Margins are healthy: small tax and accounting practices commonly return 35%, 45% of revenue to the owner once you add back salary and perks.
The trade-off is concentration and seasonality. A solo practice can have one busy season (January, April) that produces a huge share of the year's cash, and a handful of clients that represent an outsized slice of fees. That is exactly why diligence and deal structure matter more here than in an asset-heavy business.
You're not buying a spreadsheet of last year's revenue. You're buying whether those clients call you next January.
Licensing: what you actually need to own one
This is the most misunderstood part of buying an accounting firm. There is a difference between owning the business and performing regulated work:
- CPA license (state board). Required to sign audits, reviews, and compilations (attest work) and, in most states, to market the firm as a "CPA firm." Issued and renewed by each state's board of accountancy.
- PTIN (IRS Preparer Tax Identification Number). Required for anyone who prepares federal returns for compensation. Easy to obtain.
- EFIN (Electronic Filing Identification Number). The firm's authorization to e-file with the IRS. It is tied to the firm's EIN and ownership, so a change of ownership generally requires re-application or updating the IRS e-file application, plan for this in closing.
The practical takeaway: a non-CPA can buy a tax-prep and bookkeeping firm and either retain a licensed CPA on staff or keep the seller engaged for attest clients. If the firm's value is built on audit work, you'll need the license or a licensed partner. Always confirm with the specific state board, rules on non-CPA ownership vary.
Ownership rules vary by state
Some states cap non-CPA ownership of a "CPA firm" (often a majority-CPA-ownership rule). If you're not licensed, structure the entity as an accounting/tax services firm and keep attest work under a licensed professional.
What accounting firms cost
Two rules of thumb dominate the market, and good buyers triangulate between them.
| Metric | Typical range | Anchor |
|---|---|---|
| SDE multiple | 1.8×, 3.25× | ~2.33× |
| Revenue multiple (rule of thumb) | 0.7×, 1.11× | ~1.0× |
| Owner margin (SDE ÷ revenue) | 35%, 45% | ~40% |
| SBA down payment | 10% | 10% |
BizBuySell's 2025 benchmark put the average earnings multiple at 2.34× and the revenue multiple at 1.11× for accounting/CPA/tax practices, both above their five-year averages. Larger, systematized firms with staff and a stable client base earn the top of the range; a solo book that leans on one owner's relationships earns the bottom. See the live comps on our accounting firm multiples page, and price a specific target with the valuation calculator.
Price a firm in 60 seconds
Enter revenue, SDE, and a multiple, get a defensible value range.
Diligence that matters in an accounting deal
Skip the generic checklist. In a firm purchase, three things move the needle:
- Client concentration and retention. Pull revenue by client. If the top 5 to 10 clients are more than ~25% of fees, one departure reshapes the deal. Ask for multi-year retention, good books lose only single-digit percentages of clients annually.
- Recurring vs. seasonal mix. Separate stable monthly/quarterly work (bookkeeping, payroll, advisory) from once-a-year 1040 volume. Recurring revenue is worth more and finances better.
- Staff and owner dependence. Who actually does the work and owns the relationships? A firm where the seller is the product is riskier than one with tenured staff and documented processes. Confirm staff intend to stay.
Also verify: peer-review status (for attest firms), any open IRS/state issues, software stack (and its transferability), engagement letters, and whether fees have kept pace with inflation, under-billed clients are an upside, chronic write-downs are a red flag.
How to structure the deal
The retention risk is real, so the price should follow the clients. Common structures:
- Retention earnout / clawback. A portion of price (often 10%, 25%) adjusts based on the percentage of clients or fees retained through the first full tax season under your ownership.
- Seller note + transition. A seller note keeps the seller financially invested; a transition agreement keeps them present for the introductions that drive retention.
- Busy-season overlap. Time the close so the seller is available January, April to hand off relationships live.
Financing an accounting firm
Recurring revenue and near-zero asset intensity make accounting firms strong SBA 7(a) candidates. Plan for roughly 10% down, a DSCR of 1.15×, 1.25×, and typically a seller note in the stack. Because the collateral is goodwill rather than hard assets, lenders lean hard on cash-flow quality and the transition plan, bring both. Model the payment and coverage in the valuation calculator before you write an offer.
The money page
Want the earnings math? See how much accounting firm owners make and what it costs to buy one, with worked examples.
Frequently asked questions
Not always. You need an active CPA license only for attest work (audits, reviews) or to call the firm a "CPA firm" in most states. A tax-prep and bookkeeping practice can run with a PTIN and EFIN plus a CPA on staff or the seller retained for attest clients. Confirm with the state board of accountancy.
Roughly 2.33× SDE, or about 1.0× annual revenue as a rule of thumb. BizBuySell's 2025 data show a 2.34× average earnings multiple and 1.11× revenue multiple. Systematized firms with staff earn the top of the range.
Client retention. The value is recurring relationships, so deals typically use an earnout or clawback tied to how many clients stay through the first tax season, plus a hands-on seller transition during busy season.
Yes, they're strong SBA 7(a) candidates thanks to recurring revenue and low asset intensity. Expect ~10% down, a 1.15×, 1.25× DSCR, and often a seller note to bridge the gap and keep the seller invested in the handoff.
Sources
- Accounting/CPA/tax practice multiples & benchmarks, BizBuySell Valuation Benchmarks (2025).
- CPA firm SDE/revenue multiple ranges, Peak Business Valuation; FirmLever.
- CPA / PTIN / EFIN requirements, IRS e-file provider & PTIN guidance; state boards of accountancy.
