Ask around about accounting practice valuation, and you’ll notice something odd: almost nobody gives you a straight number 🤔
Instead, you get a “request a quote” form, a consultation booking, or a vague “it depends.” And sure, it does depend. However, the starting ranges aren’t actually a secret, because every serious buyer already knows them.
So here’s the catch nobody mentions: the less you understand about accounting practice valuation, the easier it is to be talked into a low one. Let’s fix that 👇
💸 So how does valuation actually work?
In South Africa, a practice is usually valued as a multiple of annual recurring fees, not just profit, but the predictable annual fee base the firm brings in.
Right now, that multiple typically lands between 0.5 and 1.4 times annual turnover. In plain terms, that’s somewhere between 50c and R1.40 of sale price for every R1.00 of recurring annual fees 📊
Therefore, a practice billing R2 million a year could be worth anywhere from R1 million to R2.8 million. That’s a huge range, and where your firm lands inside it is the whole game.
📈 What pushes your value UP
Buyers pay more for less risk. Consequently, these are the things that lift your multiple:
✅ Recurring, contracted fees — monthly retainers and annual compliance work beat once-off jobs every time
✅ A diversified client base — no single client making up a big chunk of fees
✅ Low owner dependence — clients loyal to the firm and staff, not just to you personally
✅ A stable team — people who’ll stay through the handover
✅ Clean financials and systems — tidy workpapers, modern software, healthy debtors
📉 What drags your value DOWN
Meanwhile, the opposite factors pull the number lower:
⚠️ Client concentration — one or two clients carrying the practice is a red flag to buyers
⚠️ Heavy reliance on you — if you sign off everything, a buyer is really just buying your continued presence
⚠️ Shrinking or ageing fees — a declining book gets valued cautiously
⚠️ Messy records and slow collections — anything that makes due diligence painful erodes the price
🧮 A quick real-world example
Take two practices, both with R1.8 million in annual recurring fees:
Practice A 🟢 — diversified clients, strong recurring work, staff staying on, owner already stepped back from delivery. As a result, it lands near the top (≈1.2–1.4×) → roughly R2.16m–R2.52m.
Practice B 🔴 — one client at 35% of fees, owner signs off everything, fees flat-to-declining. By contrast, it lands near the bottom (≈0.5–0.7×) → roughly R900k–R1.26m.
Same fee base. Yet the difference is well over a million rand 😮 That gap is exactly the work worth doing before you ever list.
❓ Why doesn’t anyone just publish this?
Because in the traditional model, information is the advantage. In other words, the less you know going in, the more you rely on whoever’s brokering the deal 🤷
We think that’s backwards. Open information, visible listings, and direct contact between buyers and sellers make for a healthier market — and a fairer price. That’s the whole idea behind the AFS marketplace: practice owners list with full visibility, while registered buyers actually see what’s available, instead of waiting to be shown a hand-picked few 🔓
🔎 Looking to acquire a practice?
Register as a buyer and get direct access to accounting practices listed for sale across South Africa. See what’s genuinely on the market and approach sellers yourself, with no gatekeeping in between.