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How much do you charge ...

for work on acquisitions?

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I know that I’m undercharging for the below service and need to increase fees, so would be interested in what others would charge.

This is for semi-regular company acquisitions for 2 separate clients, although I do pick up the odd other one-off jobs for non-clients:

1. Some DD work pre-offer;

2. Advice on accounting/tax/cash implications of SPA, liasing with solicitors re amending wording etc;

3. CoSec work on completion - stock transfers, change Reg Office, change PSCs;

4. Review of completion accounts prepared by seller’s accountants, usually making amendments & advising client of changes, items to be argued etc. Communication with solicitors and accountants;

Sometimes, the following is needed:

5. Further analysis and communication with solicitors, prep letters & reports for legal proceedings;

6. Letters & reports for Expert Determination etc;

If it’s relevant, I’m a Manchester based sole practitioner with 1 FT qualified, 1PT qualified, 1 FT AAT trainee. 

The trainee does the CoSec work, one of the quals reviews/does the completion accounts, I do the rest of the work. 

Many thanks

 

Replies (14)

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Psycho
By Wilson Philips
10th Oct 2019 18:56

It will depend on the deal but, typically, £25,000

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By Red Leader
10th Oct 2019 23:03

£24,000.

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By mrme89
10th Oct 2019 23:03

The fee for this can vary wildly.

Are you trying to do this as a fixed fee? If so, you shouldn't.

Estimate the hours on each stage and provide an estimated figure but ensure that its clear that it's only an estimate figure based on x hours at x rate.

Lots of communication involved. Particularly when things creep or look to be going well beyond your estimate.

Regular billing is also a good idea. If things fall through, you still want to be paid and you need to mitigate that risk.

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Replying to mrme89:
By mrme89
10th Oct 2019 23:06

Also, £23,000.

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Replying to mrme89:
Psycho
By Wilson Philips
10th Oct 2019 23:07

Agreed - we always break it down and quote for each stage - and bill as we go.

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By atleastisoundknowledgable...
11th Oct 2019 06:21

Should’ve said, t/o £1.5m-£5m.

I was going to ask if £25k was a serious price, but 3 of you said circa that, so I guess so.

No wonder these clients like me. I change £750 for #1-4 (non clients I charge another £750 for the completion accounts #4), and another £750 for #5&6!!!!

The agreement so far is that I would then be charging £600pcm for mgmts & YE for all purchased companies, however now I’m just going to be doing the YEs for £1.5-3k pa. I seriously need to discuss my acquisition fees!!! Without pi55ing the clients off.

Thinking I’ll go fixed for #1, another fixed for #2-3, not sure on #4 yet, #5-6 hrly. The 2 clients want fixed fees for as much of the work as possible & get it from their lawyers to completion stage.

Thanks for letting me know how undercharging I am - I’ll use you figures as a “I’m still cheap” opening line.

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Replying to atleastisoundknowledgable...:
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By Mr_awol
11th Oct 2019 12:30

atleastisoundknowledgable... wrote:

Should’ve said, t/o £1.5m-£5m.

I was going to ask if £25k was a serious price, but 3 of you said circa that, so I guess so.

I wouldn't put too much faith in the grouping of the above responses. When I saw £25,000 followed by £24,000 I was expecting the next comment to be £23,950.

Of course it could be that all three responses were perfectly serious and genuine but that's not the impression I held - I think that Friday feeling may be creeping in, personally.

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Replying to Mr_awol:
Psycho
By Wilson Philips
11th Oct 2019 12:33

For the avoidance of doubt, my £25k was quite sincere.

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Replying to Wilson Philips:
By mrme89
11th Oct 2019 12:46

For the avoidance of doubt, my £23k wasn't sincere.

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By SouthCoastAcc
11th Oct 2019 10:02

Where I used to work, they would start with 5% of the deal value and adjust from there.

I've had a few clients ask for a quote for this but every single one has balked at the price. It's higher risk, time consuming work.

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By paul.benny
11th Oct 2019 12:06

Answering from the perspective of being buyer or seller rather than adviser - small firms invariably undercharge, especially when the other party is a larger corporate, PE house or the like. In those cases another zero on the end would not have caused anyone to bat an eyelid.

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Replying to paul.benny:
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By atleastisoundknowledgable...
11th Oct 2019 12:08

My clients are private individuals who seem to like buying companies either from retirements or in need of turnaround.

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By Clinton Lee
11th Oct 2019 13:05

I have extensive data on fees charged in the industry (M&A / disposals / strategic and transaction advice).

I have detailed information on the fees and fee structures of all the top corporate finance firms (from your Deloittes and Grant Thorntons to your BDOs and MHAs) and most of the smaller ones.

It's my day job to know these things.

Set up a call with me and I'd be happy to have a chat. No charge.

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By Montrose
14th Oct 2019 17:04

Risk?
M& A work is at the top of the risk scale for accountants, and the fees should reflect this.
Review
i) your PI cover
ii) The specific terms of engagement for each case, ensuring there is a damages limitation cap specifically read and acknowledged by the prospective client in each case.
Just thinking about risk should encourage a proper level of billing. Clients tend to suggest your fee should be related to success in completing a transaction, but this
i) encourages you to ensure completion possibly against your better instincts
and
ii) ignores the fact that a negative comment from you may save the client many times the fee.

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