Insights From The Count Leadership Team

Private equity has already touched more than 1,000 accounting firms worldwide over the past decade, and the International Federation of Accountants found that dealmaking has accelerated sharply since 2022. CPA Trendlines counted more than 25 private-equity-backed transactions in January 2026 alone, the highest single-month total the tracker has recorded.

For firm owners fielding calls from buyers, brokers, and platforms, the market’s direction isn’t in question. What’s less clear to most owners is whether their own firm would hold up under a buyer’s diligence. We asked Count’s leadership team what separates a firm that’s ready for a transaction from one that isn’t, and why the same discipline is worth building even without a deal on the table.

What makes an accounting firm ready for an M&A transaction?

A firm is ready for a strong transaction process when its earnings hold up under scrutiny, its clients stay for years rather than one contract cycle, and its next generation of leaders is strong enough to take over. Buyers will typically price a deal on last year’s EBITDA, but they pay for confidence that the firm will keep its clients, keep growing, and perform just as well or better after the deal closes.

The best-prepared firms have clean financials and thoughtful client segmentation. They also have documented processes, a credible partner transition plan, and a leadership team that can run the firm without the founder or managing partner in the room. Readiness comes down to how much of the firm’s value sits in the institution versus in one person.

What are the biggest red flags you see when evaluating a firm?

The biggest red flag is concentration risk, too much revenue depending on one partner, one client, one industry, or one seasonal service line. After organic growth, we look for weak financial reporting and unclear realization and utilization data. Underpriced clients, partner misalignment, deferred technology investment, and no real succession plan are other common flags.

Cultural defensiveness is another major flag. Firms that can’t discuss openly what’s working and what’s broken make it hard to build trust before a deal. Being honest about problems, more than being flawless, is what earns that trust.

What should firm leaders fix first if they want to be ready?

The first fix is getting clear on the numbers. That starts with financial performance, client quality, and partner economics, and extends to leadership depth and the real growth story behind the revenue. It means separating recurring revenue from one-time work, and organic growth from growth bought through acquisition. It also means understanding margin by service line, so owners know which clients and services drive the most value.

Build a simple M&A readiness dashboard that tracks revenue by service line, client concentration, and partner age and succession exposure. Add staff leverage, realization, retention, technology, and growth opportunities, and the picture becomes clear enough that the next fix is obvious.

Does getting M&A-ready help a firm even if it never sells?

Yes. M&A readiness is good business discipline whether or not a firm ever sells, and the process makes a firm stronger, more profitable, and less dependent on any single person.

A firm that’s M&A ready usually prices better, has cleaner clients, and runs on stronger technology and people processes. Those improvements create options. The owner might sell, merge, recapitalize, bring in the next generation, or simply keep running a stronger independent firm.

What role does AI adoption play in whether a firm is ready?

It’s now an important signal of readiness, but only when firms can point to real results, client service that’s improved, staff work that’s faster, and margins that are better. A firm that has bought a tool without changing how work gets done hasn’t shown much.

CPA Trendlines reports that AI-powered firms are closing their books faster, moving staff time into higher-value work, and widening the gap with slower adopters. Firms that ignore AI can still be good firms, but they risk falling behind on productivity, talent, and client expectations.

What’s a common mistake firm owners make when preparing for a deal?

Waiting too long. Owners often start preparing only once they’re exhausted or performance has already flattened, and that compresses the timeline and cuts down on their options. Only 55% of accounting firms have a formal succession plan for their managing partner or CEO, according to Inside Public Accounting, despite an aging partner base that makes a leadership transition increasingly likely.

The other common mistake is over-focusing on valuation and under-focusing on fit. The right partner, structure, culture, leadership path, and investment plan matter as much as the headline price. The best outcomes happen when owners prepare early, know their own objectives, and choose a partner who can help the firm grow beyond the transaction itself.

Getting Ready Doesn’t Require Selling

None of this requires a firm to be for sale. A clear picture of earnings quality, client concentration, and leadership depth lets an owner choose their own path. That might mean a transaction, a recapitalization, or another year of running the firm independently.

Count works with accounting firm owners on this kind of readiness, whether or not a sale is on the table. If you want a second set of eyes on where your firm stands, have a conversation with the Count Corporate Development team.