The market is absolutely abuzz with rumors about mergers, as it seems that pursuing a plethora of acquisitions has become the norm for CPAs and their firms everywhere. Many CPAs are unfamiliar and inexperienced with acquisitions, however, and aren’t sure where to look for reliable information that can guide their future actions. Most have little idea of where to start when it comes to their own firms, and there remain mixed feelings about acquisitions throughout the market.
So, is pursuing acquisitions a smart move for CPAs in today’s economy? The answer is an undeniable yes; as you’ll come to see, chasing after more acquisitions is a stellar way to put your firm ahead, and will be necessary to your future if you’re to survive and thrive as a CPA well into the 21st century.
The market is changing
With a myriad of technological innovations like artificial intelligence and big data analytics taking the accounting sector by storm, it goes without saying that many CPAs are disorientated, and unsure of what to make of acquisitions. Some fear that merging with another firm is a mere last act of a dying company, and could spell the end of their time as a CPA. Such fears are misplaced, and should be replaced with an enthusiasm for acquisitions; now more than ever, CPAs need to scale up their operations and offer more to their clients, which they can do most effectively through acquisitions.
If you’re content with never growing your firm, don’t worry about acquisitions. If you’re concerned about a future that’s becoming dominated by job-siphoning automation, however, you’ll see the importance of continuing to innovate and expand your potential so that clients still find you relevant and desirable. If you don’t carry out a merger or a series of mergers in the forthcoming years, you may find yourself lacking the capital needed to sufficiently expand, and will certainly be lacking resources and talent that your competitors gained from acquisitions of their own.
Perhaps the greatest benefit of merging with another firm is the diversification of your clients and assets that results from such a move; in a future that’s to be dominated by a diverse market in every form of the word, you’ll want an expansive set of assets, including accounting software, to be able to rely upon when things get tight and you have to start cutting cost. Developing a special niche, too, will be vital for the future of CPAs, and by merging with other pros in their industry they can consolidate their expertise and offer a much more alluring package to clients who are looking for the biggest bang for their bucks.
Despite the good news that acquisitions bring, however, you shouldn’t rush headfirst into them without doing your homework first. After all, even successful business strategies and wise decisions can be foiled by incompetent executions of business plans and an unprepared staff that’s not been briefed on your company’s future. That’s why you’ll need to develop a game plan in order to master the acquisition process and remain relevant and growing as a CPA.
Form your team, avoid these mistakes
CPAs working within firms large or small that are considering acquisitions need to begin assembling their teams to discuss possible options, and that means bringing in people from various departments. IT specialist, HR officials, and even lower level employees should be consulted about what kind of mergers might result in the best outcomes for their respective departments, as a vital aspect of any good acquisition is that it boosts every aspect of a company’s workforce and assets.
Before you even consider an acquisition, too, you need to learn about which common mistakes you should avoid. There are many deal killers out there that could foil an acquisition that could seriously benefit your company, and you’re not doing your duty as a CPA if you’ve not brushed up on them and learned how to avoid making those same mistakes.
Responsibly handling acquisitions means learning to understand when a deal is too good to be true, too; sometimes, expanding isn’t always in your firm’s best interest, and you should be cautious that your financial eyes don’t get bigger than your stomach. Review common reasons firms decide to merge, and you can come to a more-informed conclusion about whether it’s time for you to pursue an acquisition or not.
Chasing after a valuable acquisition can be a thrilling but intimidating experience, but CPAs shouldn’t let themselves become fearful about the process of merging with another firm. This kind of expansion is the way of the future for accounting, and will result in vastly better firms with more resources at their disposals to meet the needs of clients. Start mulling over acquisitions today, and you may find yourself engaging in your first merger before you know it.
Gary Eastwood is a CPA licensed senior accountant from Seattle, Washington. He received his CPA license from the Washington State Board of Accountancy in 2001 before relocating to Onawa, Iowa in 2008. Over more than 15 years of accounting experience, Gary has worked with multinational health service providers and independent CPA firms. He has a proven ability in dealing with business clients from a variety of backgrounds as well as leading companies to greater efficiency and profitability. He is familiar with both US GAAP and China GAAP.