Merging Your PA CPA/Accounting Firm? Consider This

There are both advantages and disadvantages when Pennsylvania accounting and CPA firms merge. At PSTAP, our broad member base offers many opportunities to meet other outstanding professionals with whom a merger would be beneficial. Before taking the step, you should ask yourself a number of key questions. 

Merging accounting practices can allow both firms to expand their geographical base or reach larger clients, offer new types of services, expand their talent pool, and gain a competitive advantage over other firms in the region. It can also offer an exit strategy for partners who wish to retire and want to make sure their loyal clients and staff continue to be supported. 

However, merging comes with some risks. Most people are very uncomfortable with change, and you risk losing talented staff who may be concerned about their future in the new firm. A poorly planned merger can also leave clients confused and concerned about the care they will receive in the new arrangement, and they may take their business elsewhere in the shuffle. If the office cultures of the two firms do not mesh well, there could be office strife. Integrating technology can also be a serious problem that needs to be worked out in advance to avoid losing data or creating havoc in the transition.

When you are thinking about a merger, first ask yourself a few big-picture questions:

• What is your strategic vision? Short-term, mid-term, long-term? How will a merger help you to reach these goals? Your new partners should have the same vision or be willing to work with you before the merger begins to build an even better, combined vision.

• Do you to merge with a firm that will complement your services with adjacent but different expertise or one that will deepen your current offerings?

• What kinds of industries, niches, and types of clients do you want the merged firm to cater to?

• In order to reach these goals, do you foresee merging with a smaller firm, a larger firm, or one at about your same size and capacity?

• What is your company culture? Is it a healthy culture that you would like to maintain? Changing company culture could mean losing valuable talent.

• What type of technology do you use? Are you looking to upgrade? Do you have the IT support necessary (or are you willing to hire outside experts) to integrate or establish a new system for a newly merged firm? Are you prepared to provide training for your staff? Change can create discord. The system needs to be a clear improvement that will provide staff and clients with benefits and greater ease in order to build enthusiasm and a willingness to make the switch.

• Who will be in charge of the new combined firm?

• Who will create a detailed merger plan? The plan should include sufficient time to transition clients and staff, merge technology or create a new platform, train staff, and define exit strategies for partners as well as a new marketing plan to roll out during and immediately after the transition. Are you prepared to hire outside experts to create and implement the plan if there is inadequate in-house talent? 

Once you have answered all these questions sufficiently, begin researching firms that fit the profile that you have defined and reach out to see if the partners are willing to talk about a merger. Take the time to get to know the partners, visit their offices, and have key members of your staff visit and talk to their staff, as well. Your office should also be open to them. Make sure early on that the teams will work well together, that the partners will work well together, and that all involved have a common goal.

PSTAP members are a great resource. Reach out to our members about the process of merging to get their experiences and advice. It’s also a great place to find quality accountants and CPAs who may be looking to merge, as well.