$692K
1.9x
Subscribe Free
Read the full deal writeup
Sign up for a free Accredited account to read the editorial writeup, financials, and broker contact for this deal.
Get Free AccessFull Editorial Writeup
*** THIS LISTING IS CURRENTLY SALE PENDING. *** Overview Broker represents this CPA firm located north of White Plains, NY. The Firm The firm focuses on tax and compliance work but also provides full-service accounting. The firm has a limited number of audits/reviews and compilations. The buyer...
Why we like it
- Strong cash conversion with $692k cash flow on $800k revenue suggests efficient operations and limited working capital requirements. The 86% cash flow margin indicates this is a mature practice with established systems and pricing power in their local market.
- Tax-focused practices have built-in recurring revenue with annual compliance deadlines creating predictable client retention. The limited audit exposure reduces liability risk while maintaining the higher-margin tax and bookkeeping work that drives profitability.
- White Plains location provides access to affluent Westchester County market with both individual and business clients who value local CPA relationships. Geographic proximity to NYC creates opportunities for overflow work and referrals from larger firms.
- Professional services practices benefit from high switching costs once clients are established, creating natural moat protection. The compliance-heavy nature of the work makes clients sticky, especially during tax season when changing providers is disruptive.
How to improve it
- Implement value-based pricing for tax preparation by segmenting clients based on complexity and introducing tiered service packages. Most small CPA firms undercharge for their expertise, and a 15-20% price increase on renewals could add $120k+ to the bottom line.
- Digitize client onboarding and document collection using portals like SmartVault or ShareFile to reduce administrative overhead. This allows staff to focus on higher-value work while improving client experience and reducing paper-based inefficiencies.
- Cross-sell bookkeeping and payroll services to tax-only clients by positioning these as year-round touchpoints that improve tax preparation quality. Monthly recurring revenue from these services provides cash flow stability beyond tax season.
- Hire and train junior staff during off-season to handle routine compliance work, freeing up senior resources for business advisory services. This creates leverage for the owner while building capacity for organic growth.
- Develop referral partnerships with local attorneys, financial advisors, and business consultants who serve similar client demographics. Formalize these relationships with mutual referral agreements to create consistent lead generation beyond word-of-mouth.
Diligence notes
- Verify client concentration by requesting aging reports and fee summaries for top 20 clients to ensure no single relationship represents more than 10% of revenue. Professional practices can be vulnerable to key client departures, especially in smaller markets.
- Review staff compensation structure and retention rates to understand if the practice is overly dependent on specific employees or the owner. Check for any non-compete agreements and assess how client relationships are documented and managed.
- Analyze seasonal cash flow patterns and working capital requirements during peak tax season versus summer months. Confirm the practice maintains adequate credit facilities or cash reserves to cover payroll and expenses during slow periods.
- Examine professional liability insurance coverage and claims history, plus any outstanding regulatory issues with state boards. Request copies of recent peer reviews and ensure all licenses and continuing education requirements are current for key staff.