CPA Firm Valuation Multiples in 2026: Insights From Geoff Bruskin

The accounting firm M&A market is active, but the old rule of valuing every practice at roughly one times revenue no longer tells the whole story.

Firm size, profitability, recurring revenue, client concentration, service mix, leadership depth, technology, and the terms of the transaction can all change what a buyer is willing to pay.

On the Growing Your Firm podcast, Jetpack Workflow founder and CEO David Cristello spoke with Geoff Bruskin, founder and managing partner of White Tiger Connections, about CPA firm valuation multiples in 2026 and the forces shaping accounting-firm acquisitions. Geoff advises accounting firms on M&A, recruiting, growth, and operational improvement, giving him a close view of both buyer expectations and seller readiness.

What Multiples Are CPA Firms Selling For in 2026?

There is no single CPA firm valuation multiple that applies to every practice. Smaller owner-operated firms are often discussed as a multiple of annual revenue or seller’s discretionary earnings. Larger, more transferable firms are more commonly valued using adjusted EBITDA.

Based on the transactions Geoff discussed, many accounting firms in the lower middle market may trade around four to six times adjusted EBITDA. A particularly attractive firm can command more. In the episode, Geoff described one current listing at approximately 7.3 times adjusted EBITDA, while much larger enterprise firms may reach substantially higher multiples.

These figures are observations from Geoff’s deal activity, not universal market guarantees. The applicable earnings base, buyer type, firm quality, transaction terms, and post-close risk must all be evaluated together.

How Are CPA Firms Valued?

A valuation multiple is only useful when the number being multiplied is clearly defined. Three common approaches appear in CPA firm transactions.

1. Revenue Multiples

A revenue multiple compares enterprise value with annual revenue or gross fees. It is simple and remains common for smaller practices, especially when owner compensation and operating expenses make normalized earnings difficult to establish.

The limitation is that equal revenue does not mean equal value. A $1 million firm with recurring monthly services, strong margins, and a team that manages client relationships is very different from a $1 million firm with seasonal revenue, outdated pricing, and heavy owner dependence.

2. Seller’s Discretionary Earnings

Seller’s discretionary earnings, or SDE, estimates the financial benefit available to a single owner-operator. It commonly starts with pre-tax profit and adds back owner compensation, personal expenses, and certain one-time costs.

SDE is often more relevant for smaller practices where the buyer expects to replace the working owner. Buyers will examine every adjustment, so the calculation must be supported by clean financial records.

3. Adjusted EBITDA

Adjusted EBITDA measures earnings before interest, taxes, depreciation, and amortization, with reasonable adjustments for unusual expenses or owner compensation. It is more common when the firm has management depth and can continue operating without the current owner performing most of the work.

This is where operational maturity becomes visible. Buyers want to know whether earnings can survive a transition, whether the team will remain, and whether the firm’s systems can support additional growth.

The $8 Million CPA Firm Deal Geoff Shared

To show how valuation works in practice, Geoff described a firm that White Tiger Connections had recently brought to market. The business had several characteristics that reduced buyer risk and supported a premium asking price.

The owners spent only about 20% of their time in the business, so Geoff used an adjustment for the leadership capacity a buyer would need to replace. He also pointed to several features that made the firm attractive:

• Every client bought a recurring subscription that combined tax and accounting services.
• The client base was fully remote.
• The largest client represented only about 3%of revenue.
• The firm employed five CPAs, including two leaders.
• Its niches included remote professional-service agencies and digital creators.
• The operation could function as a platform that a buyer could expand.

The example also shows why sellers should look beyond the headline price. Only $6 million of the proposed $8 million would be paid in cash at closing. The remaining value depended on retention-based seller financing and rollover equity. Those components carry different timing and risk.

Why CPA Firm Valuation Multiples Vary So Widely

Two firms with the same revenue can receive very different offers. Buyers are not purchasing last year’s billing total alone. They are estimating the durability of future cash flow and the effort required to preserve it.

Recurring Revenue and Service Mix

Predictable, year-round revenue reduces uncertainty. Geoff’s example required clients to buy a combined tax and accounting subscription rather than selecting only one service. That created deeper relationships and reduced seasonal dependence.

A broader service model can also increase the amount of revenue earned from each client. Geoff highlighted tax, client accounting services, payroll, wealth management, estate planning, and outsourced HR as examples of connected offerings. The opportunity is strongest when the services genuinely work together rather than existing as disconnected departments.

Client Concentration and Retention

A buyer will examine how much revenue depends on the largest clients and whether those relationships belong to the firm or to one partner. Low client concentration reduces the damage caused by a single departure. Documented client history, consistent service delivery, and shared relationship ownership can also improve confidence in retention.

Team and Leadership Depth

A firm that depends on the seller for sales, technical review, client service, and staff management is difficult to transfer. A capable management layer makes the earnings more durable because the business can continue after ownership changes.

Geoff also challenged the idea that accounting firms must recruit only within commuting distance. Remote hiring can widen the talent pool, but the firm needs documented procedures, clear accountability, and technology that supports distributed work.

Pricing and Profitability

Revenue growth does not automatically create value if margins remain weak. Geoff described pricing and billing improvement as a frequent defensive priority. Buyers will look at realization, write-offs, partner compensation, billing practices, and the profitability of individual service lines.

Clear billing narratives can also reinforce value for clients by showing outcomes instead of presenting an inventory of hours. This supports better pricing and can create opportunities to introduce relevant services.

Operational Systems and Workflow Structure

Technology does not create a premium simply because a firm owns several software subscriptions. Buyers care about whether the systems are adopted, connected, documented, and capable of producing reliable data.

The firm should be able to show how work moves from client intake through delivery and review, who owns each step, how deadlines are tracked, and where management can see capacity or risk. A repeatable workflow reduces transition risk because the process belongs to the firm rather than remaining in one person’s memory.

How Private Equity Is Affecting Accounting Firm Valuations

Private equity has increased competition for scalable accounting firms and encouraged more buyers to value larger practices on adjusted EBITDA. Industry research supports the continued level of activity. Capstone Partners reported that financial acquirers represented 54.8% of accounting-services M&A activity year to date in July 2026, while deal volume involving those buyers had increased 69.1 % year over year.

William Blair also reported that consolidation and institutional investment are reshaping accounting, with buyers using acquisitions to add services, enter new markets, acquire talent, and build multiservice platforms.

However, more capital does not make every deal successful. Geoff estimated that 30 to 40% of private-equity accounting theses either fail or move toward failure. This was his professional estimate, not a published industry failure rate.

He tied poor outcomes to issues such as aggressive price increases, rushed software changes, weak cultural integration, staff departures, and client losses. The strongest buyers handle change deliberately, retain key leaders, and invest in the people and systems required after closing.

How AI May Change the Value of Accounting Firms

AI can improve margins by reducing manual work in document collection, preparation, reporting, content creation, and internal analysis. Geoff described using AI to turn detailed inputs into polished consulting deliverables that previously required far more time.

David also shared an example of using Claude Cowork to review and update a website, create schema markup, add image alt text, and identify internal-linking opportunities. The broader point was not that one tool replaces an operating system. It was that technology can complete more work when the underlying process, permissions, data, and review standards are clear.

For valuation purposes, AI readiness should be treated as operational capability rather than a collection of experiments. A buyer will want evidence that automation improves delivery, protects quality, and can be governed across the firm.

Seven Ways to Increase the Value of a CPA Firm

1. Move toward predictable, recurring revenue. Package services in a way that supports year-round relationships and reduces seasonal dependence.
2. Improve pricing and service-line profitability. Know which clients and services create margin, then correct underpriced or unprofitable work.
3. Reduce owner dependence. Build managers, distribute client relationships, and document decision-making authority.
4. Standardize recurring workflows. Define steps, owners, deadlines, review points, and exceptions for every core service.
5. Protect retention. Monitor client concentration, staff satisfaction, service consistency, and transition risk before entering the market.
6. Clean up systems and data. Make financial reporting, client records, technology ownership, permissions, and renewal information easy to review.
7. Prepare for diligence early. Document adjustments, contracts, employment arrangements, workflow procedures, and the rationale behind the valuation.

What Firm Owners Should Ask Before Accepting a Multiple

• What financial metric is the multiple applied to: revenue, SDE, or adjusted EBITDA?
• Which adjustments did the buyer accept or reject?
• How much will be paid in cash at closing?
• Is any portion tied to client retention, revenue targets, or future performance?
• How is rollover equity valued, and when could it become liquid?
• What role must the seller perform after closing?
• How will staff, clients, pricing, technology, and workflows change?
• What protections exist if the buyer changes strategy after the transaction?

A higher multiple can produce a worse outcome if the payment terms, obligations, or transition risks are unfavorable. Sellers should evaluate the full deal structure with qualified legal, tax, and transaction advisors.

Conclusion

CPA firm valuation multiples in 2026 reflect a wider range of business models and buyers than the profession saw under the traditional one-times-revenue rule.

Geoff Bruskin’s examples show why firms with recurring revenue, strong margins, low client concentration, capable leaders, and reliable systems can attract more buyer interest. They also show why a headline multiple is only the beginning. Cash at close, seller financing, earnouts, rollover equity, and post-close responsibilities determine what the deal actually means for the owner.

Even if a sale is years away, building a firm that runs consistently without the owner creates more choices. It can support organic growth, internal succession, an acquisition strategy, or a stronger external sale when the time is right.

Frequently Asked Questions

What is a typical CPA firm valuation multiple in 2026?

There is no universal multiple. Smaller practices are often valued using revenue or seller’s discretionary earnings, while larger firms are commonly valued using adjusted EBITDA. Geoff Bruskin said many of the deals he sees fall around four to six times adjusted EBITDA, with stronger firms receiving more.

Why are some CPA firms valued on revenue and others on EBITDA?

Revenue multiples are simpler and are often used for smaller owner-operated practices. EBITDA becomes more useful when a firm has reliable profitability, management depth, and operations that can continue without the seller.

What increases the value of an accounting firm?

Recurring revenue, strong profitability, low client concentration, a stable team, documented workflows, modern systems, niche expertise, and limited owner dependence can all support a stronger valuation.

How does private equity affect CPA firm valuations?

Private equity has increased competition for scalable accounting firms and placed more attention on adjusted EBITDA, growth potential, service diversification, and operational discipline. Deal quality still varies by buyer and transaction structure.

Does workflow software increase an accounting firm’s value?

Workflow software does not guarantee a higher valuation. However, it can help a firm document recurring processes, assign ownership, track deadlines, and reduce reliance on individual employees. Those capabilities can make the business easier to manage, transfer, and scale.

Is the highest valuation multiple always the best offer?

No. Sellers should compare cash at closing, earnouts, seller financing, rollover equity, transition duties, tax effects, and retention conditions. A lower headline multiple may offer better certainty or more favorable terms.

Last Updated: August 2026

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