Software Increases Practice Sale Value

Jadeja Partners have finalised the sale of a 100% Xero focused accounting practice. The practice received much attention from our short list and was whisked away for negotiations immediately after listing. The Premium achieved for the practice has made us rethink the role of software in future valuations of Accounting Practices. Could we be seeing […]

Jadeja Partners have finalised the sale of a 100% Xero focused accounting practice. The practice received much attention from our short list and was whisked away for negotiations immediately after listing.

The Premium achieved for the practice has made us rethink the role of software in future valuations of Accounting Practices. Could we be seeing a new direction creeping into the valuation process? The parameters of software use has traditionally been one of hit and miss. If the acquiring party has the same software the process is just that, a process, if not, the data migration can generally be a tedious one with doubling up of servers, excessive down time and a drop in customer service amongst others.

Why such an interest in this practice? Is purchasing a Xero practice’s data more migration friendly and does this lead to an easier takeover due to the SaaS; leading to an instant ability to move the practice and it’s components? As for the purchaser the answer was a resounding “YES”. Their interest in a Xero practice, with proven history, gives them the edge. “With previous bugs ironed out, they can overlay further volume almost immediately. The location was never a decider in the transaction” said the new principle. The new owners plan to make it become the hub for all their Xero clients as it gives them the confidence to push the Xero platform further.

It will be interesting to see what impact the competitors’ SaaS has on sale values as other practice life-cycles start presenting themselves – can they get the market thinking like Xero has?

Have you chosen a specific SaaS or use multiple services to ensure client satisfaction? Data quality is essential in the sale of a practice. Don’t hesitate to contact us to discuss further.