How do I check a bookkeeping practice’s client retention before buying?

Begin with the roster. A useful list shows when each client started, what work you would be doing, what they pay and when their fee last changed. Ask for the clients who left over the last few years and why. A seller who can explain each departure is usually tracking the practice well.

Next, look at how clients behave. Do they pay on time, send records on time and answer questions? Clients who are hard to work with can cost more than they bring in. Ask which clients the seller would keep if starting fresh.

Then ask about dependence. If the owner is the only person clients ever speak to, retention depends on a handover, not on the paperwork. Find out whether a staff member knows each file and whether clients have written engagement terms that can pass to a buyer. Finally, ask whether the seller would introduce you personally, and for how long they will stay involved. Your lawyer can advise on client consent and confidentiality in the transfer. Ask about the practice’s calendar as well. Retention often wobbles at busy filing periods, when clients compare their options, so see how many left around those times and whether the seller can explain it. Use the answers to judge how carefully the records are kept.

Key takeaways

• Get start dates, fees and departures for every client.
• Find out which clients only ever speak to the owner.
• Ask how long the seller will help with introductions.