What Is My Accounting and Bookkeeping Firm Worth? 2026 Valuation Multiples, a Worked Example, and Retention Terms

Buyers price an accounting or bookkeeping firm on earnings. They use seller's discretionary earnings (SDE) for an owner-run practice and adjusted EBITDA once a management layer runs the work. A revenue multiple is only a cross-check. The buyer picks the method, and your size decides which buyer you get.

SDE vs EBITDA method

SDE is net profit plus one owner's full compensation plus documented add-backs. It answers one question: what does this practice pay a single owner who does the work? EBITDA starts from SDE and subtracts a market-rate salary for the manager who would replace you. Partner draws come out and a market salary goes in, a step buyers call the partner-comp scrape. Apply SDE multiples to SDE and EBITDA multiples to EBITDA. If you put a 4.0x EBITDA multiple on SDE, you overstate your price by four times the cost of a replacement manager.

Revenue multiple rule of thumb

The revenue multiple is the rule of thumb owners hear first. Ad Astra Equity puts small owner-operated practices at roughly 0.75x to 1.5x gross recurring fees. Practices in BizBuySell's 2021 to 2025 accounting, CPA and tax data sold at a median 1.02x revenue. The shortcut only works when your margin looks like the median practice's. The buyer's lender underwrites the loan on historical earnings, not on fees billed. A low-margin firm cannot hold a revenue-based price through financing.

Which buyers use which method

Several buyer groups fit a practice in the SDE range: individual CPAs buying through practice brokers, regional CPA firms and local practitioners, and search funds and independent sponsors. The individual buyers in that group finance with SBA 7(a) loans. PE-backed platforms price on EBITDA and buy add-ons. Examples include Citrin Cooperman under Blackstone, Aprio under Charlesbank Capital Partners, Baker Tilly under Hellman & Friedman and Valeas Capital Partners, and Sikich under Bain Capital. The same advisor guide cites sponsor-level platform deals at 9x to 15x EBITDA, with Blackstone's purchase of Citrin Cooperman near 15x. Those are prices for whole platforms, not what a platform pays for an add-on.

A practice near the closed-sale median of $208,303 of SDE will meet the first group. A firm with a management layer and more than $2 million of enterprise value enters the EBITDA bands that platform acquirers price against. The full breakdown of who pays what is in who buys accounting and bookkeeping firms.

Owner-run practices sell at 1.61x to 2.66x SDE, with a median of 2.04x. Firms worth $2 million to $10 million trade at 4.0x to 6.0x adjusted EBITDA. The closed-sale rows below come from BizBuySell's valuation benchmarks for accounting, CPA and tax practices sold from 2021 to 2025. The advisor rows come from Ad Astra Equity's accounting firm guide, which gives pricing ranges rather than individual sales.

Size tells you which rows to use. The middle half of sold practices had $240,000 to $771,527 of revenue and $124,753 to $357,273 of SDE. The medians were $400,000 of revenue, $208,303 of SDE, and a $425,000 sale price. If your practice sits in that band, the SDE rows are your market. Accounting firm valuation multiples on EBITDA apply once a buyer can take you out of the firm and run it with a paid manager.

Do not average the two SDE sources. The closed-sale quartiles show what actually sold. The advisor range shows where advisors price practices under about $2 million. Price your firm against the closed-sale median of 2.04x first, then use the drivers in the next section to argue for the upper quartile of 2.66x.

Five things move the multiple: recurring fee share, client concentration, who holds the client relationships, staff depth, and how much of the work falls in tax season. Under the pricing guidance below, the largest of these move it by up to two turns.

Recurring monthly retainers

Recurring monthly retainers are why two firms with the same SDE sell at different prices. In a retainer book, the buyer can see next year's revenue. A tax-return book has to be won again every spring. Client accounting services and outsourced CFO work are valued at 1.5x to 2.0x the multiple of seasonal tax prep. In a bookkeeping business valuation, buyers ask early for the retainer schedule: client, monthly fee, start date, and scope. Firms priced on EBITDA that get above 60% recurring move into the 7x to 10x band.

Client concentration

Client concentration is each client's share of annual fees. The clean profile has no client above about 10% of fees and the top ten below 35%. When one client is above 20% to 25%, pricing guidance applies a 15% to 30% discount. Above 35%, the buyer caps the cash it pays at close and moves the rest into retention-contingent payments. Pull a ranked fee list for your last fiscal year now, because the buyer will build the same list from your billing system in diligence.

Owner dependence

Owner dependence shows up when advisory revenue sits with one partner and clients call you instead of your staff. Guidance takes 1.0x to 2.0x off the multiple for it. The fix is a handoff the buyer can see before the sale. For a full tax cycle, a manager signs the engagement letters, runs client meetings, and owns the calendar for your largest clients.

Staff retention

Staff retention matters because the buyer is paying for the people who do the work. Bench depth and realization in the mid-to-upper 80s add 0.5x to 1.0x. In an asset sale, employees do not transfer automatically. The buyer offers employment, and a key manager who declines can reopen the price. Buyers ask for stay agreements or retention bonuses for named staff. A culture gap between your team and the acquirer's can stop a deal even when the numbers work.

Attest work and licensing

CPA firms are licensed at the state board level, and attest work requires CPA ownership and firm registration. A PE-backed buyer uses an alternative practice structure (APS). Attest stays in a CPA-owned licensed entity, and advisory and tax go into the entity the sponsor owns. Significant attest revenue adds an independence review and lengthens diligence. Bookkeeping and tax-only practices without attest work generally do not need a CPA-licensed firm, so your buyer pool can include non-CPA operators, individual buyers, and search funds.

A practice with $1,500,000 of revenue and $400,000 of SDE is worth $644,000 to $1,064,000 at the closed-sale quartiles, and $816,000 at the median. A larger firm with $1,600,000 of EBITDA prices at $6,400,000 to $9,600,000 in the 4.0x to 6.0x band.

Example A: an owner-run practice priced on SDE

The revenue rule of thumb gives a higher answer, and you should not anchor on it. The median sold practice earned $208,303 of SDE on $400,000 of revenue. This firm earns $400,000 of SDE on $1,500,000, so far less of each dollar of fees reaches the owner. The buyer's debt has to be paid from the $400,000, and the lender tests it against that figure.

Each documented add-back is worth the multiple. Say a buyer rejects the $50,000 of add-backs. SDE falls to $350,000, and the median value falls to $714,000 ($350,000 × 2.04), a $102,000 cut. Check which items hold up in what add-backs a buyer will accept. At $816,000, the price is above the $350,000 SBA threshold, so a financed buyer's lender must order an independent valuation.

Example B: a managed firm priced on EBITDA

The second firm has $6,000,000 of revenue and $1,600,000 of EBITDA after paying a general manager $150,000. Its SDE equivalent is $1,750,000 ($1,600,000 plus the $150,000 salary). Buyers at this size price EBITDA, so the multiples below apply to the $1,600,000 only.

Ad Astra notes that a quality of earnings review tests WIP and AR. It also notes that the partner-comp scrape plus one-time items can change reported EBITDA by 10% to 30%. Run the low end of that range. A 10% cut is $160,000, which takes EBITDA from $1,600,000 to $1,440,000 ($1,600,000 minus $160,000). At 6.0x, value moves from $9,600,000 to $8,640,000 ($1,440,000 × 6.0), a $960,000 swing. Commission your own sell-side review of WIP, AR, and partner pay before you sign an LOI, so the buyer's quality of earnings confirms your number instead of resetting it.

An accounting firm sale pays you through a mix of four pieces: cash at close, a seller note, a retention-based payout tied to client fees, and, with PE platforms, rolled equity. The mix decides how much of your headline price is certain on closing day.

Cash at close and the SBA limits behind it

If an individual or search fund buyer finances with an SBA 7(a) loan, SBA rules set the ceiling on your cash at close. The loan maximum is $5,000,000. The buyer injects 10% of total project cost, and up to half of that can be a seller note on full standby. A common structure is 5% buyer cash plus a 5% standby note from you. A standby note gets no principal or interest payments for the life of the SBA loan. Interest can accrue and is paid after the SBA loan is repaid.

SOP 50 10 8.1 has been in force since October 1, 2026. Under it, the business must show at least 1.25x debt service coverage on historical results, using the last fiscal year or a two-year average. Projections cannot be used to meet it. This is an SBA requirement for buying a business, so your reported earnings decide how much debt a buyer can carry. A seller note that is paid currently counts in that coverage test. The business-acquisition portion of the loan amortizes over no more than 10 years. You can test a sample structure in the SBA 7(a) loan calculator.

When the business purchase price is above $350,000, the lender must order an independent valuation from a Qualified Source, meaning an ASA, CBA, ABV, CVA, or BCA credential holder, prepared for the lender. Total acquisition debt cannot exceed that valuation. That debt is the SBA loan plus any seller debt not on full standby. If your price is above the appraised value, the gap has to come from buyer equity or a note on full standby.

At a business purchase price of $3,000,000 or more, the lender also needs a quality of earnings report. It must include a cash proof for the trailing twelve months and the last two fiscal years. You cannot commission it. The report may not be prepared by or for the seller. Under the September 25, 2026 technical update, a lender may review a quality of earnings report the buyer ordered through a qualified vendor if it meets SBA minimums. The lender then uses the report's normalized earnings in the coverage test.

Retention-based payouts and clawbacks

A retention-based payout ties part of the price to the fees your transferred clients pay after closing. The buyer sets a baseline from your client list and measures fees from those same clients over an agreed window. The price is then adjusted for any shortfall. The payout can take three forms. One is a holdback of cash at close, released after the window. Another is an earnout paid as fees come in. The third is a seller note the buyer can offset against lost clients. All three move money from closing day to later. A clawback goes a step further and makes you return cash you were already paid.

Negotiate these terms in detail:

• which clients are in the baseline
• whether fee increases the buyer imposes count against you
• whether clients the buyer drops or reprices count against you
• how the measurement window lines up with tax season
• whether a retained client who grows can push the price back up

Client retention above 90% adds 0.5x to 1.0x in pricing guidance. A documented retention history is your case for more cash at close and a smaller contingent piece.

Rollover equity with PE platforms

PE-backed platforms can pay part of the price in equity of the platform itself. Rolled equity is worth whatever the platform sells for at the sponsor's next exit. Diligence the platform the way it diligences you: its debt, its sponsor's hold period, and what earlier sellers now own. In an attest firm, the APS keeps your attest practice in a CPA-owned entity, so your purchase agreement has to cover both entities. Before you sign an LOI, write the cash at close, the contingent amount, and the rollover value as three separate numbers, and compare offers on cash at close first.