- ChongAccounting
Who want to Merge (Accounting Practice)?
Updated: Dec 25, 2020
Let's start with the Objective -- Merge and Grow Big.
Then, Let’s continue with the "Why Not" …
Why mergers fail?
· Ego or the unwillingness of partners to adapt to new changes
· A poorly though out and communicated firm name
· Introduction of change too quickly can scare off staff and clients.
· Failing to have a succession plan, particularly for exiting partners
· Don’t have proper transition for staff
· Failure to integrate technology
· Impatience
But does that deter us to stop thinking about Merge & Grow ? No… So,
Why merge?
Based on statistics from MIA, more than 90% of accounting firms in Malaysia are sole proprietor practices. [June 2008, Accountants Today]
For non-audit firm, in year 2014. [won't be much different in 2020 or 20221]
· Key benefits
o Transition from Accounting to Advisory
o Capacity and competency to serve niche market
o Diversity of experiences from Partners to complement each other
o Career path for the staff / employees [Staff Retention]
o To enable both parties to tapping into wider market
>> Provision of Academy
>> Wealth Advisory
>> High-Value General Advisory
>> HR Consulting
>> IT Consulting
· Long term benefit
o Exit plan – be able to sell the "enlarged" practice at superb good price, must be an attractive brand at investment grade’s size.
· Small benefits
o Fill up empty office space?
o Spread technology costs?
o Utilise excess staff?
o Share Branding budge?
When to merge?
· Intended to grow fast
· Losing business opportunity due to current size or limitation.
· Losing clients or staff?
More issue to be considered....
How to value the firm?
· Billing
· Profit
· Weighted Average of Billing and Profit
Management and Driver of Grow
· Ownership
o Who to drive it?
o Control vs Ownership?
· Profit allocation
o Salary
o Profit sharing
Keen to merge?
Contact us Hello@CnpsAssociates.com or
P/s -- If Chong Accounting can't find candidate to merge, may be can be the intermediary for other firms to merge.
For Reading
What is your firm worth?
https://www.accountingweb.com/practice/growth/how-to-properly-value-your-cpa-firm
More information in MIA's website https://www.mia.org.my
Home / Professional Practices and Technical https://www.mia.org.my/v2/downloads/smp/roadmap/events/2016/06/02/merger/speakers/Coverage%20of%20Key%20Issues%20&%20Action%20Required%20by%20Dato'%20Jasani.pdf
Below are the documents available in MIA website, uploaded here for quick and easy reference.
2016 MIA M&A Coverage of Key Issues & Ac
.
Download • 1.23MB
2016 MIA M&A Enhancing Value of Practice
.
Download • 6.83MB
MIA M&A Pros and Cons
.pdf
Download PDF • 2.35MB