I was wondering how much it would cost to buy a small to medium sized accounting firm in malaysia. Is there any such thing as an accounting company? just for research purposes. thanks.

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Added on April 29, 2008, 2:35 amhow much profit would an sme get per year? net.
after tax?
whats the market like for business taxation right now. who deals with it? the big four?



This post has been edited by yuckman98: Apr 29 2008, 02:35 AM

at the range 250k - 1 mil... depends how long is the company established and customer base...

not sure about the profits...

Is this is a serious enquiry? If it is, I may be able to assist if you are serious about acquiring such companies as we have access to a portfolio of such companies.

With regards to your question, these are the answers.

(1) Net after-tax profit earned by a small-to-medium sized (SMZ) accounting practice
This figure will vary based on 3 major factors:
(a) The type of services provided by the SMZ accounting practice, whether it's mainly vanilla book-keeping, or mainly high-margin special assignments (what we call "specials"). You will need to see whether the accounting practice provides (financial and / or tax) due diligence services, restructuring / recovery services, IPO support (reporting accountant role), etc.
(b) The no. of clients (and fee appetite of those clients) on the books. You'd want to know what percentage of the business is recurring business.
© Whether or not tax incentives or grants are applied to that SMZ accounting practice.

(2) Cost to buy an SMZ accounting practice
Assuming a 100-company client base, with recurring net billable revenue (there is all sorts of revenue measures, but this is key for the practice) of RM2 million, RM 1 million worth of specials, and with a typical controllable cost margin, service sector transaction comparables, control premium of 25%, no more than 10% in grants and tax incentives, I'd estimate a cost of somewhere between RM 15mil - RM 20 mil to buy such a practice.

(3) Business taxation
The big 4 dominate the business taxation market. It's one of the most profitable areas for the business. Furthermore, because a lot of taxation regulations are locally determined, the big 4 invest heavily in standard-setting. The example is GST. For example, we spend a lot of money pushing the development of the regulations - at the same time as we are preparing local corporates for its eventual adoption.

There's always a market for talent, and there are still a number of accounting, advisory and taxation firms for sale.

If you are interested in buying a business in this area, of if you are interested in selling a business in this area, contact me. We may be able to help you. I am located in the KL Sentral area, and available to meet up.

This post has been edited by Playbook: Apr 29 2008, 03:52 PM