[IMGCAP(1)]Baby boomers have been driving and are expected to continue to drive an increase in the sale of businesses in the next decade, given their influential ownership of private companies.

In fact, a survey of deal advisors earlier this year by Pepperdine Private Capital Markets Project, the International Business Brokers Association and M&A Source, found that baby boomers made up 65 percent of new clients trying to sell and 41 percent of client buyers.

Given accountants’ standing as trusted advisors to business clients, this means an unprecedented opportunity for firms looking to increase their valuation engagements. Boosting a firm’s valuations practice may also help accountants looking to offer additional advisory services to counterbalance increasingly price-focused compliance engagements.

Accounting firms that want to capture these opportunities can take steps now to prepare for the additional business. By considering your firm’s needs, you can map out a plan for scaling your valuation services profitably.

Two Major Areas Worth Reviewing: People and Processes
If your firm expects to ramp up valuation services, it’s important to identify staffers within and outside of the firm who are enthusiastic and qualified to work in this area. This could mean beginning to plan for changes in focus areas for some staff accountants, or it could mean recruiting new staff with education or experience in valuations.

Now is also a good time to be thinking about and connecting with other professionals (lawyers, bankers, etc.) who may be able to refer valuation business to you. These people can also be resources for your clients in other aspects of succession planning, a business sale or whatever prompts the valuation engagement.

On the topic of processes, accountants of course need to remain up to date on standards guiding professional appraisers conducting business valuations. These include the Statement on Standards for Valuation Services (SSVS) published by the AICPA and the Uniform Standards of Professional Appraisal Practice published by the American Society of Appraisers.  

But firms should also evaluate opportunities within the firm to streamline the process of providing a business valuation.

Home-grown, Excel-based systems for creating valuations pose several challenges for firms hoping to increase the number of valuation engagements rapidly and efficiently. These systems:

* Are typically housed on one professional’s desktop computer, making it more difficult to collaborate with professionals working in different locations.

* Often generate a “spider web” of spreadsheets that must be explained and articulated, making it more complicated to bring on board and train new talent quickly.

* Re-use templates that must be manually updated, checked and proofread multiple times to ensure a previous client’s information isn’t mistakenly left in the template.

* Are prone to errors related to the use of spreadsheets. A University of Hawaii study on spreadsheet errors noted, “[M]ost large spreadsheets will have multiple errors, and even relatively small ‘scratch pad’ spreadsheets will have a significant probability of error.”

A software solution that helps you reduce risk and save time in performing compliant valuations is one way to ensure your accounting firm can boost valuation engagements.

Mary Ellen Biery is a research specialist for Sageworks, a financial information company that provides financial analysis and industry benchmarking solutions to accounting firms, and also offers the Sageworks Valuation Solution.

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