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Accounting / CPA firm Sale-Prep Checklist

Licenses, documents and fixes buyers look for when you sell a accounting firm

Know your number

[ ] Recast earnings to SDE (and adjusted EBITDA if above about $1M of earnings)
[ ] Run the accounting firm valuation calculator and save the brief
[ ] Estimate after-tax proceeds under asset vs stock sale

Licenses and transfer issues for accounting firms

Done	Issue	What to know
[ ]	CPA ownership rules	Under the Uniform Accountancy Act model, a majority of a CPA firm's ownership (financial interests and voting rights) must be held by CPAs. PE deals keep the attest firm CPA-owned and sell the non-attest business.
[ ]	Client tax information	IRS rules (26 CFR 301.7216-2) allow limited transfer of client lists in connection with the sale of a tax practice, and pre-sale diligence under a written confidentiality agreement. Get client consent where required.
[ ]	Firm permit	State boards require firm registration or permits; a new owner or entity may need its own permit.

Documents buyers will ask for

[ ] Fees by client and service line for 3 years
[ ] Client retention history
[ ] Engagement letters
[ ] Staff roster and credentials
[ ] Software and workflow stack
[ ] Peer review report (if attest work)

Fix what buyers discount

[ ] Owner dependence: document processes, delegate selling and scheduling, cut your hours in the work
[ ] Customer concentration: no single customer above about 15% of revenue
[ ] Recurring revenue: convert one-off customers to agreements or plans
[ ] Clean books: separate personal expenses, reconcile monthly, keep 3 years of tax returns ready

Deal structure notes

Small-firm deals frequently pay part of the price over time and adjust it for client retention; PE platforms pay cash plus equity through an alternative practice structure.

Timeline

Sellers usually time closings around tax season; transitions commonly run through at least one full season.

Rules vary by state; confirm licensing and transfer requirements with counsel. General information, not legal or tax advice.

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