Discussion:Purchase of clients
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Discussion Forum Index --> Business Growth Community --> Purchase of clients
| 27 July 2007 | |
| I may have the opportunity to purchase the tax clients of a retiring PA. In the past I've read that the going rate is $1 for every dollar of prior years billings - is this correct? Do most purchase agreements have a retention clause? What is the comon down payment & terms for this type transaction? Any tips on this type of transaction?
Thank you- | |
| 27 July 2007 | |
| I worked with a firm who entered into a similar arrangement. I'm not sure how the down payment was calculated, but the deal was structured so that our firm paid the retiring CPA 1/3 of the revenue from retained clients for 3 years following the purchase. So we did not pay for clients who did not stay with us. Also, the payments were based the retained client's billed fees the year prior to sale. So if a client's situation changed and their return prep fee was $1,000 more than it was the last year that the retired CPA did the return, we did not have to pay for the extra revenue. In this situation, we paid the retired CPA every six months, so a total of 6 payments. | |
| 28 July 2007 | |
| E mail me your phone number to discuss DZCPA@YAHOO.COM I have purchased 5 firms since 1988. | |
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