top of page
Search
  • 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?


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?


More information in MIA's website https://www.mia.org.my


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

107 views0 comments

Recent Posts

See All

人脉

很多人都听过或明白,人脉就是钱脉。美国著名的人际关系学鼻祖戴尔·卡耐基曾说:“一个人的成功,专业知识占15%,85%取决于人际关系”。 然而,很多人都误会了人脉真正的意思。人脉不是你认识的人有多少个,而是有多少人认识你,而且还认可你。当彼此有合作共赢的机会和有等价交换的利用价值时,这才是真正的人脉! 原文 https://www.enanyang.my/%E5%90%8D%E5%AE%B6%E4%

Doctor, Private Hospital and Income Tax

The Inland Revenue Board “IRB” has issued the guidelines on Tax Treatment on the Income of Medical Practitioners (Specialist Doctors) in Private Hospitals on 16th March 2022. The guidelines explain wh

bottom of page