Receiving an offer for your accounting practice is an important milestone.
After years of building the client base, developing the team and managing the day-to-day demands of the practice, finding a suitable buyer can feel like the point where the sale is almost complete.
However, an accepted offer is not the same as a completed transaction.
The period between accepting an offer and reaching settlement is often the most detailed stage of the entire sale process. This is where the buyer verifies the information they have received, the final commercial terms are negotiated and both parties prepare for the transfer of the practice.
Understanding what comes next can help sellers avoid delays, protect the agreed value and create a smoother transition for clients and staff.
The buyer will conduct due diligence
Before submitting an offer, a buyer may only have access to an overview of the practice.
They may understand the approximate revenue, profitability, number of clients, staffing structure and services provided. Once their offer is accepted, they will generally want to examine the business in much greater detail.
This process is known as due diligence.
The buyer may review financial statements, tax returns, client fee reports, work in progress, debtors, staffing costs, employment arrangements, lease obligations, software agreements and professional compliance.
They may also want to understand whether revenue is concentrated among a small number of clients, how dependent the practice is on the principal and whether the current team can continue operating the business after settlement.
Due diligence is not necessarily an attempt to uncover a problem.
The buyer is trying to confirm that the practice matches the opportunity presented to them and to understand exactly what they will be taking responsibility for.
Preparation can protect the transaction
A seller who is organised and responsive can make the due diligence process significantly easier.
Financial records should be current and consistent. Client reports should be capable of being produced accurately. Employment arrangements, software contracts and lease obligations should be properly documented.
When information is incomplete, contradictory or difficult to obtain, the buyer may begin to lose confidence.
They may request additional conditions, seek greater protection in the sale agreement or attempt to renegotiate the purchase price.
This is one reason sellers should prepare the practice before taking it to market.
Preparation is not simply about making the business more attractive. It also helps the transaction progress more efficiently once a buyer has been found.
An accepted offer may still be conditional
Many offers are subject to conditions.
These may include satisfactory due diligence, finance approval, legal documentation, landlord consent, professional requirements or agreement on the seller’s transition role.
The parties may have agreed on the broad commercial terms, but important details may still need to be resolved.
For example, the offer may include an upfront payment combined with deferred payments. Part of the price may depend on client retention or future revenue. The buyer may also require the seller to remain involved for an agreed period.
This is why sellers should assess the complete structure of an offer rather than focusing only on the headline price.
A higher offer may contain more risk, uncertainty or ongoing obligations. A slightly lower offer may provide a cleaner structure and greater certainty at settlement.
The sale agreement must be negotiated
Once due diligence is underway, the legal advisers will generally begin preparing and negotiating the sale agreement.
This document sets out what is being sold, how the purchase price will be paid and what each party must do before and after settlement.
The agreement may address work in progress, debtors, staff entitlements, client retention adjustments, warranties, restraints, confidentiality and the seller’s transition responsibilities.
These negotiations can take time.
The seller will usually need advice from their solicitor and accountant to understand the legal, tax and financial consequences of the proposed transaction.
The business broker also plays an important role during this stage by helping the parties communicate, keeping negotiations moving and resolving commercial issues before they become major obstacles.
The practice must continue operating normally
Once an offer has been accepted, it can be tempting for the seller to begin mentally stepping away from the business.
However, the practice still needs to perform at the level the buyer expected when making the offer.
Clients should continue receiving the same level of service. Staff should remain supported and productive. Work in progress, debtors and revenue should continue to be monitored.
A noticeable decline in performance may concern the buyer and could affect any payment terms connected to revenue or client retention.
Until settlement occurs, the seller remains responsible for protecting the value of the business.
Confidentiality and communication require careful planning
A sale should generally remain confidential until the parties agree on a communication strategy.
If staff or clients learn about the proposed transaction too early, it may create unnecessary uncertainty.
Employees may worry about their roles. Clients may question whether the practice will continue providing the same service. Competitors may also use the information to approach clients or staff.
At the same time, leaving communication too late can create its own problems.
Key employees may feel excluded or blindsided. Long-standing clients may feel that a major change has been handled without sufficient consideration.
The buyer and seller should agree on when staff and clients will be informed, who will deliver the message and how questions will be answered.
The communication should focus on continuity, stability and the benefits of the transition.
Settlement may only be the beginning of the handover
Many accounting practice owners remain involved after settlement.
They may introduce the buyer to important clients, assist with technical matters, support staff or continue working within the practice for an agreed period.
This involvement can give clients confidence and help the buyer understand the practice more quickly.
However, the transition arrangement should be clearly documented.
Both parties should understand the seller’s responsibilities, expected hours, duration of involvement and remuneration.
Unclear expectations can create frustration after the transaction has been completed.
Managing the sale through to completion
Accepting an offer is an important step, but a successful sale requires careful management all the way through due diligence, legal negotiations, settlement and transition.
BCI Business Brokers assists accounting practice owners throughout the complete sale process.
We help sellers prepare their practice, identify suitable buyers, assess offers, negotiate commercial terms and manage the transition towards settlement.
The offer may have been accepted.
The next priority is making sure the sale completes successfully.
If you have questions about finding the ideal buyer for your Accounting business, feel free to reach out. Contact us for personalised assistance and expert guidance.