Mergers and acquisitions (M&A) are commonly part of a CPA firm’s growth strategies to increase revenue quickly. However, the success of these endeavors relies on effective processes. This article will explore the challenges CPA firms face during the M&A process and explain the significance of optimizing these operations to save time and money. We will also provide practical steps and a case study to review how CPA firms can create efficiencies in their transition period and improve new client and employee onboarding for success.
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Challenges in the M&A Process
CPA firms encounter numerous challenges when managing M&As. Some of these challenges include:
Analyzing situations where M&As have gone awry is vital to understanding the potential risks. In some cases, poor integration planning and execution have resulted in minimized profit potential, client dissatisfaction, and loss of talent. These examples serve as cautionary tales and reinforce the importance of streamlining the process.
By implementing efficient processes and having a collective plan among all staff responsible for carrying out the migration, CPA firms can navigate cohesively through the M&A process. These advantages include:
By adopting efficient practices, CPA firms can optimize the benefits and synergies that emerge from mergers and acquisitions, ultimately enhancing their success. Here are some practical steps CPA firms can take to improve the M&A process:
Leveraging technology solutions and automation is a critical step to streamlining the M&A process. Comprehensive software dedicated to financial due diligence, such as Dealroom.net, PracticeERP, and Ansarada, can simplify due diligence, data analysis, and integration of financial systems. Automation reduces manual data entry and errors, saves time, improves accuracy, and increases speed.
Identifying designated leaders and establishing clear communication channels is vital throughout the process. When all parties involved have an understanding of goals, responsibilities, and timelines, it becomes easier to coordinate efforts and ensure everyone is working towards the same objective.
Before the M&A agreement is finalized, document all tasks that need to be completed as part of the transition and set achievable timelines for each task. With enough practice this dynamic list will create the foundation of your firm’s custom M&A checklist to be used as a future standard for other M&As.
Case studies provide valuable insights into the effectiveness of streamlining. CPA firms implementing streamlined processes have experienced improved efficiency, reduced costs, and enhanced client satisfaction.
In 2023, EisnerAmper LLP, the 15th-largest accounting and consulting firm in the US, acquired Berdon LLP, a top 25 CPA firm with offices in New York and New Jersey. The acquisition was a strategic move for EisnerAmper to expand its presence in the Northeast and offer its clients a wider range of services.
Berdon was a well-respected firm known for providing its clients with high-quality accounting, audit, tax, and consulting services. The firm focused on the financial services, technology, and healthcare industries.
EisnerAmper was attracted to Berdon for its strong team of professionals, its client base, and its geographic footprint. The acquisition allowed EisnerAmper to expand its presence in the Northeast and offer its clients a more comprehensive range of services, including specialized consulting services in mergers and acquisitions, risk management, and human resources.
The acquisition was also beneficial for Berdon’s clients. They gained access to EisnerAmper’s global network of resources and expertise. EisnerAmper also invested in Berdon’s technology and infrastructure, allowing the firm to continue to provide its clients with the highest quality services.
There are several potential benefits to CPA firm M&A, including:
Efficiently managing mergers and acquisitions is vital for CPA firms to overcome challenges and achieve successful transitions. CPA firms can enhance their chances of success and long-term growth by optimizing operations and mitigating risks. A well-managed process ensures smooth integration, maximizes the advantages of the merger or acquisition, and fosters improved client relationships. By implementing the strategies outlined in this article, CPA firms can effectively navigate the M&A process. Contact us today for more information or to schedule a consultation. Our agency is ready to assist you in facilitating a successful transition and a prosperous future. Together, we can elevate the success of your mergers and acquisitions endeavors.