An Australian accounting practice is typically worth between 0.8x and 1.4x its annual gross recurring fees — or 3–5x EBIT if you’re running a larger, more systemised firm. The wide range isn’t vagueness; it reflects how dramatically client quality, staff depth, and revenue mix shift the buyer’s risk calculation. A tax compliance practice built around two hundred loyal SME clients looks very different on a term sheet from a practice where one client accounts for 30% of fees.
If you’ve been running your practice for a decade and you’re starting to think about what comes next, this is how the number actually gets made.
How Accounting Practices Are Valued in Australia
There are two methods that matter, and serious buyers use both as a cross-check.
Gross recurring fee (GRF) multiple. The traditional method — and still the most common for smaller practices. Take your average annual recurring billings over three years and apply a multiplier. For a standard compliance-focused firm with a stable client base, that multiplier sits between 0.8x and 1.2x. For a well-systemised practice with strong advisory revenue, recurring bookkeeping, and low partner dependency, buyers regularly push to 1.3x or 1.4x. Above 1.4x is achievable but requires a compelling story — usually a PE-backed consolidator who wants your geographic footprint or your client demographic.
EBIT multiple. More common for larger practices — say, $3M+ in fees — where the buyer is thinking in terms of return on capital rather than fee multiples. A well-run practice with an EBIT margin of 25–30% will attract 3.5x–5x EBIT from a motivated buyer. At $500K EBIT, that’s a $1.75M–$2.5M valuation range, which should roughly reconcile with the GRF approach if your margins are near benchmark.
The reconciliation matters. If your GRF multiple and EBIT multiple produce very different numbers, something unusual is happening — either your margins are out of step with the industry (which a buyer will flag immediately) or you’ve been aggressive in how you’ve calculated either figure.
The rule of thumb in accounting practice sales: if you can demonstrate that the revenue continues without you — through staff, systems, and documented client relationships — you get the top end of the range. If revenue walks when you do, you get the bottom.
What Drives Your Multiple Up or Down
The headline multiple is just the starting point. Here’s what actually moves it.
Revenue quality. Recurring compliance fees (tax returns, BAS, payroll, financial statements) are worth more than one-off project work because they’re predictable. Advisory and management accounting retainers sit above compliance in a buyer’s hierarchy — they’re higher margin and stickier. A practice where 70% of fees are recurring and advisory attracts a meaningfully higher multiple than one that’s 80% compliance and relies on the same clients coming back by habit rather than contract.
Client concentration. If your top five clients represent more than 40% of your fees, buyers will price that risk explicitly — either through a lower headline multiple or through a vendor finance or earn-out structure that puts part of the purchase price at risk if those clients don’t stay. I worked with a partner a few years back whose firm had one client contributing $380K out of $1.1M in total fees — a government body that had been loyal for twelve years (which was more than most could say about a government client) — but the buyer still deducted a hypothetical loss scenario from the valuation model.
Staff depth. Who actually does the work? A sole practitioner who handles all client relationships personally is selling something fundamentally different from a practice with a team of senior accountants, a client services manager, and documented processes. The question buyers ask is: if you disappear on day one, what breaks? The more the honest answer is “nothing”, the better your multiple.
Technology and systems. This is the gap opportunity most sellers underestimate. A practice running on Xero Practice Manager or MYOB Practice with a clear workflow system, a CRM, and documented procedures for every recurring engagement is demonstrably lower-risk than one that runs on the principal’s memory and a shared drive full of unsorted PDFs. (I’m not exaggerating — I’ve seen both, and the difference in buyer confidence is significant.)
Who Buys Australian Accounting Practices
Understanding your buyer pool shapes how you should present your practice and what price you can realistically achieve.
Sole practitioners and small firms looking to add a geographic office or grow fee revenue are the most common buyers for smaller practices (under $1M in fees). They typically apply the fee multiple approach and fund the purchase through a mix of bank debt and vendor finance — where you carry 20–40% of the purchase price as a loan repaid from cash flows over two to four years. This is standard in the industry and not a red flag; it’s how the math works when buyers don’t have deep pockets.
Mid-size independent firms buying up smaller practices in their region to build scale. Perth has seen a reasonable amount of this in the last five years, as regional consolidation accelerates.
Private equity-backed consolidators — groups like Findex, Kelly+Partners, and CountPlus — are the highest-value buyers if you qualify. They’re running acquisition strategies with explicit fee and EBIT targets, and they pay at the top end of the range for practices that fit their model: clean financials, strong recurring revenue, a team that can operate without the founder, and a geographic market they want to be in. If you’re running a $3M+ practice in a metro area, you should absolutely have a conversation with at least one consolidator before signing anything.
The buyer you end up with will shape not just your price but your handover obligations, your earn-out structure (if any), and how much of your personal goodwill is at risk. Goodwill in accounting practice sales is particularly nuanced — a significant portion sits with you personally, and any competent buyer will structure the deal to protect themselves against its departure.
How to Increase What Your Practice Is Worth Before You Sell
If you’re two or three years out from a sale, you have genuine options. The highest-leverage moves in the accounting practice context:
Reduce client dependency on you personally. Start transitioning client relationships to senior staff now. Even small gestures — having a senior accountant lead a client meeting you attend, copying them on correspondence, introducing them as the relationship manager — compound over two years. A buyer who meets your team during due diligence and hears clients speak well of your staff (rather than exclusively of you) prices that differently.
Lock in recurring revenue. Move transactional clients onto annual retainers or fixed-fee arrangements. Not just because the revenue is smoother — because it’s documentable. Recurring revenue under a signed engagement letter is an asset on the Information Memorandum. Revenue that recurs by habit is just hope.
Run clean financials for three years. Stop running personal expenses through the practice beyond what’s genuinely defensible. Every add-back you need to explain to a buyer creates friction and erodes trust. Three years of clean, consistent P&Ls with normal owner remuneration is worth more than higher adjusted earnings that require a conversation.
Document your processes. Write down how you do things. Onboarding, workflow management, billing, review. One afternoon per process. This is the most underleveraged value driver in accounting practice sales — and the one that costs the least to fix. There’s more detail on what buyers look for across all sectors in our guide to preparing your business for sale.
Tax on Selling Your Accounting Practice
The structure of your practice entity and the structure of the deal — asset sale versus share sale — determines how much of the sale price you actually keep.
Most accounting practices are owned through a company or family trust. If you’re selling through a company and the buyer acquires your shares, the proceeds are a capital gain. Held for more than twelve months, the 50% CGT discount applies, and the small business CGT concessions can reduce that gain further — potentially to zero if you’re over 55 and retiring. This is the ideal scenario.
If you’re selling via an asset sale (which some buyers, especially sole practitioners, prefer — they get a clean start without inheriting your entity’s history), the tax outcome differs. Fee books and work in progress may be assessed as ordinary income. Goodwill is treated as a capital gain. The mix matters. Get this sorted well before heads of agreement are signed.
Read the full breakdown of tax on selling a business in Australia before you finalise your deal structure — the difference between a well-planned and a poorly-planned sale is often $100K or more after tax. Worth the investment in advice before you sign.
Where to Start
If you want a rough sense of what your practice might fetch before any formal process, our valuation calculator will give you an indicative range based on your fee revenue, margin, and practice structure.
If you’re ready for a proper conversation — particularly if you’re in Perth or regional WA, considering retirement in the next three to five years, or curious whether a PE buyer might be in the picture — get in touch directly. We’ll give you a straight read on what you’ve built and what it’s likely to sell for in the current market.
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