Due diligence is where a good-looking deal proves itself — or falls apart. Before you buy an accounting practice, work through this checklist (and lean on your own professional advisors for the specifics).
Fees and revenue
- A detailed fee analysis: recurring vs once-off, by client and service line.
- Client concentration — what share sits with your largest clients.
- Historic fee trends: growing, flat or declining?
- Work-in-progress and debtor days.
Clients
- The full client list with tenure and services.
- Retention history and any recent losses.
- How dependent relationships are on the current owner.
People and premises
- Staff contracts, tenure, qualifications and likely retention.
- The office lease — term, cost and transferability.
Systems and data
- Software in use and the state of the data and workpapers.
- Cybersecurity and how client data is stored (relevant for POPIA).
Compliance and risk
- The practice's own tax compliance with SARS.
- Professional body membership and, for audit firms, the relevant registration.
- Professional indemnity cover and claims history.
- Any pending disputes or litigation.
Deal terms
- How the price is structured, and what's tied to client retention.
- Restraint of trade on the seller.
- The handover period and the seller's role during transition.
Turn findings into terms
Everything you uncover should shape the price and the agreement — not just be filed away. A confidential process lets you get to this detail only once the seller has agreed to engage.
