The Succession Crisis Reshaping Accounting

For many small accounting firm owners, business succession is a matter of deep personal significance. The owner has spent decades building relationships with clients, created a major source of income for themselves, and ultimately, their retirement hangs on it. But the market is proving more unforgiving day by day, as demand expands while talent shrinks. Owners are left wondering who to safely entrust their business to without seeing their hard-built legacy wiped out.

With roughly 87,000 firms, the U.S. accounting market is highly fragmented. Many are small practices built around one CPA or a handful of senior professionals. Most of their value lies in the recurring revenue, but that is built on trust—a much harder thing to transfer. Clients may have worked with the same accountant for years and still call the owner directly when there’s an urgent issue. While the owner is around, the model survives, but once the owner wants to exit, the structure collapses.

A wave of retirements is now moving through the profession—roughly 75% of CPAs are set to retire within 15 years, with fewer buyers and successors available than in the past. Most of the conversation about this moment focuses on buyers and private equity: deal volume, multiples, and consolidation strategy. Less of it focuses on the owners actually trying to exit. This industry-wide shift could force thousands of firms to sell, merge, or close within a few years, disrupting client relationships built over decades.

The old succession model is under pressure

Historically, a small practice had a couple of straightforward succession options. A younger CPA could buy the book. A peer firm could absorb the clients. Or even a family member could take the reins. These options still exist, but at a diminishing rate—adult children are increasingly not stepping in to take over the family practice, a generational shift as much as an economic one.

For instance, the AICPA’s 2025 Trends report found that bachelor’s and master’s degrees in accounting fell by 6.6% in the 2023-24 academic year. Enrollment has since improved, including an 8.9% year-over-year increase at four-year undergraduate programs in spring 2026, but that rebound will take time to move through the profession. The Bureau of Labor Statistics still projects about 124,200 openings for accountants and auditors each year through 2034, many created by workers changing occupations or leaving the labor force, including through retirement. For the companies operating with fewer than 10 people, this creates an imminent succession crisis. Roughly 30,000 to 40,000 U.S. accounting firms are expected to change hands over the next several years as their owners retire, representing more than $20 billion in annual revenue.

Consolidation is not the promised panacea

Private equity and larger accounting groups have been at the forefront of bringing capital in. The International Federation of Accountants found that 177 direct private-equity investments facilitated another 875 roll-up acquisitions between 2015 and 2025. This gives many firms potential buyers, but the economics tend to favor big firms. Acquisitions carry fixed costs, including diligence, legal work, integration, and client communication. Even if a small practice is profitable, it can still be difficult to transact if too much of its value depends on one retiring founder.

A firm below the scale PE typically targets doesn’t stop needing a succession plan just because it’s too small for that buyer pool. The employees need continuity, and the clients need the services. The question remains for the owner: how to align this with their retirement outcome so it is win-win for all.

How technology changes the economics of succession

Small firms spend substantial staff time on repetitive work. Things like transaction categorization, reconciliation, data entry, document collection, and workflow coordination. When software and AI absorb more of that work, it frees up the accountant’s time to work on client experience by answering questions, interpreting results, spotting problems, and helping owners make decisions. That is what built trust in the first place, and with technology, the operational capacity to preserve that trust improves.

Technology can reduce the cost of routine work, but it cannot manufacture long-standing client relationships and institutional judgment. A well-run firm with loyal clients may therefore become more attractive to a technology-forward buyer. Owners do not need to become tech companies before selling, but they must be wary of buyers who oversell AI or promise to transform the practice immediately, before understanding the relationships and processes they are inheriting.

A useful checklist for owners

Here’s the practical checklist for owners planning to exit and questions sellers should ask prospective buyers:

How gradual can the transition be? A staged handoff gives clients time to build confidence in the new team and lets the owner reduce involvement without exiting abruptly.
What will actually change for clients after the sale? Ask who will handle the day-to-day work, what changes will occur in the first 90 days, six months, and first year, and whether the buyer has sufficient capacity to maintain the service clients are used to.
What happens if the buyer’s assumptions do not play out? Owners should understand what they will actually be paid if clients leave, integration costs rise, or the practice underperforms.
Which type of buyer is actually the right fit for your practice? Match buyer type to your goals and firm profile.
- Individual CPA if you have a small practice (under ~$300,000 revenue), minimal staff, and want the simplest possible transaction with someone who will personally carry on client relationships.
- Larger regional firm if you want your staff absorbed into a stable organization, are comfortable retiring your brand, and value a proven local acquirer.
- PE-backed platform for maximizing headline price, and if you are comfortable with more complex deal structures, deferred consideration, and less certainty around long-term staff retention or brand continuity.
- Strategic roll-up if you want a buyer who will integrate gradually, prioritize client retention, and retain your people, and you are willing to accept a competitive but not top-of-market valuation in exchange for that approach.

A firm built over decades represents a network of relationships in which people have learned to trust a professional with sensitive financial decisions. As more owners retire, the profession needs succession models that preserve those relationships while giving sellers a credible financial exit. Whichever option the owner picks, the outcome will depend more on the trust retained than on the transaction size.

ABOUT THE AUTHOR:

Slava Orekoff is co-founder and CEO of Numica. A serial entrepreneur and global executive, he spent more than a decade at SAP, rising to senior vice president, and has more than 25 years of experience across business, accounting, and technology. He first built accounting software at age 17, holds an Executive MBA from Stanford Graduate School of Business and master’s degrees in physics and economics, and mentors at the Stanford Venture Studio.

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