When it comes to CPA firm M&A, two things remain constant. No matter what changes may come with the players, financial terms, valuation and structure, M&A is always about money and advantage.

The parties to a transaction have always and will always look for money and advantage. The good news is that, so long as money and advantage are the motivators, smart transactions will be made, and better businesses will emerge. Yet it is imperative to know what satisfies the need for money and advantage.

Acquirers and successors, especially private equity-infused ones, are going to place an emphasis out of the box on high-performing firms, that is, firms with high profitability and technologically progressive platforms. They will view high performers as a more assured way to make money, along with a quicker way to get there.  

The valuation for high performers will always be highest — and the competition to acquire that firm will be high as well. 

High performers offer several advantages, including an accelerated path to revenue growth, an inclination for innovation, a cross-selling culture, excellent clients, a history of offshoring and outsourcing, creative services, and talent with high upside potential.

High-performing firms that are selling or otherwise aligning will also look for lucrative financial outcomes but may need to be prepared for a higher pressure to perform. 

Advantages that the high performers seek include deeper service offerings, accelerated financial upside for up-and-coming potential partners, advanced technology, different types of talent, and more motivation and stimulation. 

High performers are accustomed to working differently and taking risks. 

When looking for a successor or acquirer, a common mission and culture will be essential to give any owners looking for an exit strong confidence. It will offer others optimism about the prospects for a better and more sustainable business model.

However, the M&A market is not just about the high performers. It is about the average firm and specialty firms. 

Average firms would be wise to address three critical ways to competitive and present the potential for money and advantage to all sides: 

1. Study your practice metrics and implement a two-year improvement and upgrade program. Successors will make money when the clients of a target firm are comfortable with market-based fees and market-savvy services. 
2. Create a roster of expanded services that will resonate with your clients.
3. Cull out the low-end clients and fees.

Specialty firms may fall in the high-performing profile depending on their achievements, but they also may not have focused sufficiently on their KPIs and client selectivity. Depending on the specialty, metric benchmarks will differ and the criteria for accepting the right fit for a client will vary, as well. Specialty firms need to be sure they have a solid understanding of their competitive positioning as an expert relative to other similar firms to create a more compelling option for acquirers.

There is a big difference between fixer-upper firms and those on the cusp of excitement. 

Acquirers are not inclined to bid low and take on a fixer-upper. They are prone to negotiate for firms that have upside — especially upside they feel they can nurture quickly, along with potential they feel others are unable to appreciate.

There are no perfect businesses, but there are excellent businesses. 

Smart acquirers perpetuate excellence by pursuing money and advantage. Smart sellers need to make their case easy to see that money and advantage are at hand — and show they are willing to make partnership a reality. 

Average firm owners need to be ready to accept incentive components rather than fully secured terms. The average firms are looking for enhanced financial security (money) and enhanced business viability (advantage).

So long as CPA firms focus on being businesses first and foremost, M&A will continue, and all kinds of players will be in the game. Make money and advantage your mission and it will pay off.

President-elect Donald Trump’s vow to repeal subsidies for electric vehicles risks pushing Republican congressional allies into conflict with their home-district economic interests.

The once-and-future president campaigned on promises to eliminate incentives for EVs, a signature policy of the Biden administration. That threatens billions of dollars in investments and thousands of current and promised jobs at EV facilities, many of which are located in states aligned with the GOP. 

Republicans represent congressional districts with 19 of 25 major automaker battery and EV assembly plants in operation or under construction, according to an analysis by Bloomberg. Most of the remaining facilities in Democratic Party-represented districts are in states which supported Trump in November’s election. 

Trump has made rescinding President Joe Biden’s pro-EV initiatives a key plank of his economic platform. In his address at the Republican National Convention in July, he promised to “end the electric vehicle mandate from day one” of his second administration. To do that, he needs congressional approval to eliminate incentives such as a $7,500 per electric vehicle buyer subsidy in the Inflation Reduction Act, which was approved by a party-line vote in August 2022. 

Such a move could be tricky with Republicans poised to hold slim majorities in Congress next year. Lawmakers are in a tough spot choosing between loyalty to Trump and constituent interests. Biden chided legislators facing that dilemma in a speech earlier this week at the Brookings Institution in Washington. 

“The historic investments we made went to more red states than blue states,” he said. “Will the next president stop a new electric battery factory in Liberty, North Carolina, that will create thousands of jobs?”

That question may weigh heavily on Richard Hudson, a Republican congressman representing the North Carolina district where Toyota Motor Corp. spent $14 billion on a lithium-ion battery plant set to open next year and create 5,000 jobs. 

Hudson, the chairman of the National Republican Congressional Committee, isn’t showing his hand.

“We’ll look at all of that,” he told Bloomberg when asked about Trump’s plans for the IRA and other Biden-era policies. 

Carmaker political clout

Among the reasons carmakers flocked to Republican-leaning states are lower labor and land costs, as well as increased clout with GOP lawmakers — a hedge against shifting political winds in Washington.  

The auto industry is anxious to pare back what it views as overly burdensome Biden policies in areas such as fuel economy standards. But it doesn’t want to jeopardize EV investments. Beyond buyer subsidies, the IRA also provides tax credits for up to $10 billion to fund a battery plant or $35 per kilowatt-hour for battery cells once it begins production. 

Albert Gore, the executive director of the Zero Emission Transportation Association and the son of former Vice President Al Gore, said he expects some level of federal aid for EVs to survive the incoming administration.

“We’re past election season,” he said. “There’s an understanding and certainly a willingness to try to do right by any of the constituents that will be affected by any changes to these policies.”

Conflicted lawmakers may try to thread a needle by presenting more nuanced proposals. 

Those Republicans could “present different policy options that strike a careful balancing act over how many of these jobs could be lost,” said Ron Bonjean, a Republican strategist and former House and Senate leadership aide.

GOP Rep. Brett Guthrie of Kentucky, the incoming chairman of the House Energy and Commerce Committee, wants to halt tax credits for EV buyers and new funding for battery plants — but not go back on promises already made.

“We have to look at it with a scalpel and not necessarily a sledge hammer,” Guthrie told Bloomberg, noting Ford Motor Co. has invested in EV battery plants in his district. “There are businesses that made investments based on what the law was. We need to look at that,” he said.

Letter campaigns

Eighteen House Republican lawmakers signed an August letter to House Speaker Mike Johnson asking him not to gut all tax credits and emissions regulations in support of EVs. 

And the head of the Alliance for Automotive Innovation, the auto industry’s biggest lobbying group, petitioned Trump to keep EV and other auto-related tax credits in a separate letter. 

But the president-elect hasn’t shown any signs of backing down. 

His advisors already are planning to reexamine tailpipe emission standards imposed by the Environmental Protection Agency as well as stringent fuel economy requirements finalized in June, Bloomberg reported last month, citing people familiar with the matter.

Wolters Kluwer announced the addition of multi-year audit planning and a business rules engine to its TeamMate+ audit management platform. 

The multi-year audit planning feature automates and optimizes audit planning, enabling users to manage audits over multiple periods. By leveraging organizational data already stored within TeamMate+, the tool lets users develop a forecasted audit schedule, while allowing for adjustments based on professional judgment and documentation of rationale. 

The business rules engine provides in-context guidance for end users, promoting adherence to established organizational standards, mitigating data inconsistencies and reducing reliance on reactive quality checks to help audit teams ensure data integrity throughout the audit cycle. 

“These new features reinforce Wolters Kluwer’s commitment to supporting the evolving needs of audit and control functions,” said Charlene Noll, director of product management with Wolters Kluwer Audit & Assurance. “Multi-year audit planning and business rules engine empower teams to better navigate complex regulatory environments, maximize resource efficiency, and uphold high standards of data governance. These enhancements are designed to provide audit leaders with the tools they need to make informed, strategic decisions in a timely manner.” 

The new capabilities will be available through the TeamMate+ platform, currently live in 150 countries and available in 19 languages. 

Wolters Kluwer released TeamMate+ in 2017, touted as a new version of TeamMate reimagined from the ground up as a configurable, web-based audit, risk and compliance platform. Six months ago the company announced that it had achieved TISAX and ISO 27001 certifications for its TeamMate+ solutions. 

Wolters Kluwer recently announced a raft of new integrations for its CCH Axcess solution, including CCH Answer Connect to provide instant insights, the CCH Axcess Beneficial Ownership solution,  CCH ProSystem fx Scan with AutoFlow Technology,  CCH Axcess Workflow, Xpitax BOI Outsourcing Services,  CCH Axcess Client Collaboration,  CCH Axcess Document, and  CCH Axcess Practice.