How to Keep Clients after Purchasing a CPA Practice

When someone buys an accounting practice, the major asset they are buying is the current book of business. Although there may be office furnishings, equipment, trained employees, and earned goodwill, the one thing out of all of these that is producing ongoing revenue is the client base. And for every client you lose, it will be two or three times more difficult to obtain a new one.

With all this in mind, the number one goal when you take over a CPA practice should be client retention. You need to treat your new clients like pure gold and do everything possible to retain them all. It is true that clients come and go for all kinds of reasons, and you can never be assured that you will be able to keep all of them. But you should be able to make sure that your new ownership of the practice is not the reason they are leaving.

Here are some of the most important steps to take to keep clients after purchasing an accounting practice:

Actively Court your New Clients: As soon as you take over, try to establish a good first impression with your clients. Have the current owner set up a meeting with each of the clients so he/she can introduce you and endorse you. Show your clients that you are committed to going above and beyond to take care of them. Be responsive to their needs, return all of their calls, texts, and emails in a timely manner, and reassure them that they will continue to receive the same quality of service and guidance as the previous owner provided.

Resist the Urge to Initially Change Too Much: One of the best ways you can make your new clients comfortable working with you is to keep as much of the current systems and structure in place as possible. One area in this regard that is very important is employees. In many ways, your employees can make or break your client relationships. If you treat them well, they will want to stay on and continue doing quality work. If you fail to treat them right, there are many ways they can sabotage your practice. Bottom line: do everything you can to send your clients the message that there is no reason for them to panic over your new ownership.

Focus Extra Energy on Major Clients: Every practice will have some clients that account for a larger percentage of the firm’s revenue. It goes without saying that these major clients are extremely important, and you will need to go the extra mile to keep them. Provide as much face time with these clients as they require and look for extra ways to win them over. For example, if they are football fans, get them tickets to an NFL game. If you find out that they have a certain interest, such as gardening, give them a book about that topic. Oftentimes, little things like these are what help secure solid, long-term relationships.

Work Out an Effective Transition Plan: Earlier, we talked about having the current owner introduce you to his/her clients. However, you may even be able to go a step further and keep the owner on at least for a while during the transition period. This may not be possible in all circumstances, but if a present owner is willing to continue working under new ownership, this would be a great opportunity to demonstrate stability to your new clients. Along the same lines, many CPA practice purchases are contingent in some way on a certain level of client retention. If you have a deal like this, the current owner will also have a financial incentive to work hand-in-hand with you to retain clients.

If you put yourself in the shoes of your new clients, you will realize that you have a lot of advantages that will help you retain them. Sure, they may be nervous when they find out that they are losing their trusted advisor and they will now be working with someone new. But they also know that you are qualified to help them, and you already have all of their financial records. At the end of the day, your clients have very little to lose by at least giving you a try. And at that point, all you have to do is earn their trust.

Perform your Due Diligence: One final note about client retention. There are some circumstances when a buyer of an accounting practice may inadvertently walk into a losing situation. This can occur when a practice has a couple of large clients that account for a major percentage of their revenue, say 30% or 40%. As we talked about earlier, clients can drop off for a lot of reasons, retirements, business closing, etc. And if you lose a client like this, it can be devastating to the practice you just bought.

Pay very close attention to the current client makeup of the practice and find out if there are any clients that you could not to afford to lose. If there are any, ask probing questions to find out more details about these clients, and you may even want to insist on some assurances that they are not going anywhere in the near future.

To help ensure that you are looking at CPA practices that would be a good fit for you, it is best to work with a reputable business broker, and preferably one who specializes in the buying and selling of accounting practices. By working with an experienced business intermediary, you will be able to reduce much of the tedious legwork during due diligence and only consider practices that match your specific criteria.

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