Accounting Firm Acquisition- Client Retention?

November 03, 2025

by a searcher from Georgia Institute of Technology in Atlanta, GA, USA

Hello, my wife (a CPA) and I are exploring acquiring a CPA firm. One of the big questions we have is how much customer churn to realistically expect due to the transition. Realistically, we're seeing our offer will be competitive with <$2M firms. In that range, we are seeing that the owner is directly involved in managing customer relationships. That’s perfectly fine, but we’re realistic that some client attrition is likely due to the ownership transition. Has anyone here gone through a CPA firm acquisition and willing to share their experience with client retention?

Reply by a professional
from University of Central Florida in Chicago, IL, USA

I've done diligence on about 12 accounting firms in the last 1.5 years. Churn is going to be high if the seller isn't retained and doesn't have skin in the game. The firms I've done diligence on were part of a broader roll-up in which the seller got rollover equity. You can mitigate the churn by doing an earnout and keeping the seller on for 2-3 years to smoothen the transition period. Obviously, you also want them to sign a non-compete for when they do eventually leave.

Reply by an investor
from Wright State University in Bellefontaine, OH 43311, USA

Great thread from ^redacted‌ from a couple years ago https://x.com/patrickdichter/status/1719868076433326104

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