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Business valuations: Opportunities for accountants

Mary Ellen Biery
March 25, 2014
Read Time: 0 min

Have you ever had a business client who was terrific to work with but who stopped being a client because he or she retired? 

If you’ve been an accountant for long, chances are you’ve seen a business client or two drop off of your list because the owner retired and closed out the business because they had no family member to succeed them, or because they sold the business to another firm that had its own accountant. If you haven’t seen this happen yet, you could in the coming years. 

According to family business expert Joseph Astrachan, editor of the Journal of Family Business Strategy, less than a third of all family-owned businesses make it to the next generation, and only 12 percent survive into the third generation.

Meanwhile, a recent survey of nearly 1,000 privately held businesses by Pepperdine University found that 1 in 5 plan to transfer their ownership interest during the next 3 years, and 38 percent of business owners planned to do so within the next 5 years. With baby boomers aging, there are bound to be many business owners who are interested in exploring options for the next phase of their life’s work.

That means a lot of companies will or should be looking for an exit strategy, and as trusted business advisors, accountants offering business valuation services can help these clients and discover new revenue opportunities at the same time. Business valuation services meet current needs and distinguish the firm through specialized services. Accountants are able to help business owners evaluate how much their company is worth now, and they can coach these owners on the best way to maximize the value of their business, either in the sale of the business or in estate planning.

Valuation services can also be employed to assist clients with annual assessments of an Employee Stock Ownership Plan (ESOP), with shareholder disputes or divorce litigation, or with fairness opinions.

As a CPA, you have the ability to be a tremendous resource to your clients by being able to accurately value businesses. At the same time, demands on busy accountants make it critical to have a clear structure and organization of the process, streamlined efficiency and solid documentation. Business valuations can range from the very simple to the very complex, but regardless of your needs, there are software solutions that can help guide you to accurate calculations.

Sageworks, the leader in the financial analysis of privately held companies and maker of ProfitCents, recently unveiled a business valuation platform that can help accountants determine an accurate and legally defensible value for private companies. Sageworks Valuation Solution is web-based and can provide consistent, justifiable and replicable calculations. Because it produces valuations that are compliant with the AICPA’s Statement on Standards for Valuation Services (SSVS) , valuation analysts have more time to use professional judgment and discretion on other aspects of the engagement.

Sageworks Valuation Solution also incorporates Sageworks’ private-company database to allow users to benchmark performance of a business against similar businesses from across 1,400 different industries. 

Get more information on how to help clients accomplish their personal and business goals.

About the Author

Mary Ellen Biery

Senior Strategist & Content Manager
Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research, and other resources that help financial institutions drive growth and manage risk. A former equities reporter for Dow Jones Newswires whose work has been published in

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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