What an accounting practice costs, per dollar of fees
Professional fee books trade on the most honest currency in business sales: recurring revenue, priced per dollar. Accounting practices, financial planning books and mortgage trail books each have their own published conventions, and lenders treat their buyers as a preferred class. Here are the numbers.
Accounting practices
| Fee base | Price per $1 of recurring fees |
|---|---|
| The working market band | 80 cents to $1.10 |
| Business and advisory clients | $1.00 to $1.30 |
| SMSF administration fees | $1.50 to $2.00 |
| Individual tax return books | 50 to 90 cents |
| Larger practices ($3m plus fees) | priced on earnings, 3.5 to 5x |
The mix is the message: SMSF and business advisory fees trade at double the rate of individual returns, client concentration above 40% in the top five clients gets discounted explicitly, and sole-practitioner books price below systemised firms. Sub-$1m deals commonly carry 20 to 40% vendor finance, which lenders read as the seller's confidence.
Planning books and trail books
Financial planning books price on client age: 2.5 to 3.2 times recurring revenue for investment and super clients under 65, sliding to 1 to 1.5 times for clients over 80, because the revenue's lifespan is the asset. Mortgage broking trail books trade in a wide band, roughly 1.5 to 3.5 times annualised trail, with run-off rate and clawback exposure deciding where a book lands; the current published guide sits at the top of that band on strong buyer demand.
How professionals finance these purchases
Accountants and advisers are preferred borrowers: specialist lenders fund up to 70% of a practice purchase as standard and up to 100% with guarantor support or the practice itself as security, no property needed, because the assessment runs on the fee base's post-settlement cashflow rather than hard assets. Where property backing is used for the balance, it prices at roughly 6% to 9% p.a. as a working rule. Start at business acquisition finance, or read the rent roll guide for the property-management cousin of these books.
Frequently asked questions
How much does an accounting practice cost to buy?
The working market band is 80 cents to $1.10 per dollar of recurring fees, with business and advisory fees at $1.00 to $1.30, SMSF administration at $1.50 to $2.00, and individual return books at 50 to 90 cents.
What is a financial planning book worth?
2.5 to 3.2 times recurring revenue for investment and super clients under 65, sliding with client age to 1 to 1.5 times for clients over 80.
What is a mortgage trail book worth?
A wide band of roughly 1.5 to 3.5 times annualised trail income, with run-off rate and clawback exposure on young loans deciding where a book prices.
How are practice purchases financed?
Specialist lenders fund up to 70% standard and up to 100% with guarantor support, assessing the fee base's cashflow rather than hard assets, and vendor finance of 20 to 40% is common on smaller deals.
Fees, mix and the funding stack
Tell us the fee base and its mix and we will come back with the structure, usually within a day.
This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.