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.
Get your number from the lender panel
The figures above are indicative. Tell us what you are buying and we will come back with the real rate and repayment, usually within a day. No upfront fees and no credit check to get a quote.
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.