Matter & Substance
  June 5, 2014

Why Do CPA Firms Merge?

Mowery & Schoenfeld has merged/acquired three certified public accounting (CPA) firms in the last five years. We are very happy with our decisions. Our industry is in the midst of a wave of consolidation. So why do CPA firms merge?

Below are my theories on merging from the perspective of the acquiring firm:

  1. Additional flexibility.With critical mass from mergers we are able to experiment, take more risks, leverage internal staff skills beyond accounting, and fund initiatives we may not otherwise be able to fund to better serve our clients and our staff.
  2. More resources to invest in the business.We can hire accountants with specialized skills to expand our capabilities and we are able to invest in new technologies to better serve our clients.
  3. New opportunities to help more clients. We love what we do, but the icing on the cake is how we help businesses succeed.
  4. Increased opportunities for employees.We are able to retain the best of the best because we offer unique opportunities and challenges for staff as we grow. We also continue to build strength in our teams with more experienced staff from mergers helping us continue to provide seamless, efficient and effective services to our clients.

Below are my theories on pursuing a merger from the perspective of a smaller firm merging into a larger firm:

  1. Exit strategy. Without a strong succession plan in place, mergers present the opportunity for partners to retire while giving employees and clients stability.
  2. Lack of resources to grow with clients. Smaller firms often are unable to grow their services at the rate of growing client demands due to their lack of staff resources. Mergers allow clients to remain with the firm while offering them added service capabilities.
  3. Increased opportunities for employees. Staff merging into a larger firm are presented with new opportunities for growth, teamwork, challenges and setting a career path.

Our search for the right firms with the right clients and the right staff will probably never end. However, our goal is not just to grow, our goal is to grow through mergers and acquisitions when it strategically makes sense for our staff and for our clients.

Jeff

"As we look ahead into the next century, leaders will be those who empower others." - Bill Gates