What an accounting practice is worth

The quick answer

Accounting practices are quoted as a multiple of annual gross fees, and the multiple clusters around one. Sold-transaction data from BizBuySell for accounting and tax practices closed between 2021 and 2025 puts the median at 1.02× revenue, with half of all sales between 0.92× and 1.17×. Brokers who sell the larger and better-run practices quote higher corridors: 0.9–1.3× (Poe Group Advisors), 0.8–1.5× (New Clients, Inc.), and up to 1.5–2× of billings for unusually profitable firms (Accounting Broker Acquisition Group, Journal of Accountancy 2015).

The revenue multiple is a shorthand. What buyers and their lenders underwrite is earnings: seller’s discretionary earnings (SDE) for a practice one owner can run, normalized EBITDA for a firm with a management team. In the same BizBuySell data the median sold earnings multiple is 2.04× SDE, and the median SDE margin ran between 41% and 61% of revenue depending on the year. Two practices with the same fees and different margins are not worth the same, which is why the estimator below asks about mix and concentration, not just fees.

Three pricing bases that must not be mixed

What the sold data shows, year by year

BizBuySell publishes benchmarks from practices sold on its marketplace. The set skews to small, owner-operated practices, many of them SBA-financed, with a five-year median revenue of $400,000 and median owner earnings of $208,303. It is the only public transaction series for the category; the broker ranges above are experience, not data.

Two readings matter for a seller. Practices sell within a few percent of the asking price, so the price is set by the listing, not by the negotiation. And the 2024 dip in sale price came from smaller practices changing hands, not from lower multiples: the revenue multiple stayed near 1× and the margin that year was the highest of the series.

Asking prices in California right now

On 22 September 2026, the eighteen California listings with both figures on the largest specialist broker’s regional page asked between 1.01× and 1.69× annual revenue, with a median of 1.27×. That is a different population from the BizBuySell sold set (broker-marketed, larger, tax-and-CPA heavy), and asking is not sold; the gap between a 1.27× ask and a 1.02× sold median is the room in which terms, margin, and buyer competition get settled.

Estimate a range

How the estimator works: the size band sets a base corridor (under $500,000: 0.85–1.15×, the rounded sold interquartile range; $500,000–$2 million: 0.9–1.3×, the broker corridor; $2–10 million: 1.0–1.4×, where buyers increasingly price on EBITDA). Recurring work above 40% of fees adds 0.1×; a book that is under 15% recurring loses 0.1×; a client above 25% of fees loses 0.1×; no seller transition loses 0.1×. The corridor is capped at 0.6–1.4×. It prices the headline, not the terms.

What moves the multiple

Every broker guide lists roughly the same drivers. The ones below are the ones with a number or an observed listing behind them.

• Recurring fees. Monthly bookkeeping, payroll, and client accounting services are paid for more readily than annual returns that must be re-won each spring. Naab Consulting quotes advisory-heavy practices 20–30% above compliance-only ones (claimed); tax-focused books sit at the bottom of its 0.8–1.2× range.
• Cash-flow margin. Accounting Practice Sales contrasts a 25% and a 60% cash-flow practice as different assets; the sold data shows margins from 41% to 61% across years. Brokers who quote 150–200% of billings are describing high-margin firms priced on SDE.
• Client concentration. Naab and lender guidance flag any single client above 10% of revenue; Poe and Berkshire list concentration among the negatives that cut price or force a retention clause.
• Fee level. Buyers pay for pricing power. California broker cards show average fees per return from $295 to $1,888 on different practices, and raising fees to market before listing is standard preparation advice.
• Staff who stay. A one-person practice is priced as a client list; a practice with staff who do the work and will stay is priced as a business. Key staff without non-competes are a listed negative.
• Cloud and remote delivery. APS reports virtual practices commanding a premium (claimed); California cards now state the share of clients with no in-person meetings, up to 92–99%, because it tells the buyer the practice can be relocated or consolidated.
• Size and the buyer pool. A $300,000 practice has many more buyers than a $3 million one (APS). Small firms tend to command higher revenue multiples than large ones (Journal of Accountancy, 2014), while the largest firms are bought by platforms on EBITDA.
• Location. APS and Poe both put a 10–20% premium on practices in desirable metro areas (claimed); Naab argues location matters less as work goes remote.
• Lease and the seller’s plans. Long, expensive leases and a seller who wants to keep working indefinitely are on every negatives list. A short, defined transition helps the price; an open-ended one hurts it.

Terms change the price more than the multiple does

Brokers repeat one line in different words: 100% cash at closing is not the same price as 20% down and the rest over four years. The same $880,000 headline (1.1× on $800,000 of fees) pays out very differently under the three structures common in the market.

The bank-financed structure has become the norm for practices marketed by the large specialist brokers, who say they sell the majority of their listings for all cash at close with no retention clause. Midwest broker guidance describes 60–80% cash plus a 20–40% earn-out over two to three years as typical, and California’s long-standing convention pairs seller financing with a guarantee of gross revenue. Which one you get depends on the buyer’s financing, your region, and how much retention risk the buyer sees; the how-to-sell guide sets out the structures in detail.

What reduces the value

The negatives lists published by Poe Group Advisors and Accounting Practice Sales overlap almost completely: declining growth or revenue; incomplete or disorganized records; client concentration; long-term or expensive leases; unreasonable transition expectations; key staff without non-compete agreements or retention incentives; and partial sales or a seller who plans to remain indefinitely after closing. Each of these is fixable in the year before a listing, which is why broker roadmaps start twelve months out.

California, Florida, Michigan, Delaware

There is no public sold-price series by state; the data above is national. What differs by state is the size of the local buyer pool and the rules on transferring client files, which set the timeline. Census County Business Patterns (2023) count 18,655 accounting, tax, bookkeeping, and payroll establishments with employees in California (7,542 of them CPA offices), 12,917 in Florida (4,664), 3,472 in Michigan (1,349), and 386 in Delaware (142). California is also the one state of the four with its own 90-day client-consent regulation for practice sales (16 CCR §54.3, effective April 2024), which is why California closings are planned around the notice period. The state pages under practices for sale carry the local rules and the directory’s count of firms in each state.