Growth is an important goal for most firms and in many cases, the quickest way to increase practice size is to acquire or merge in another firm.  Unfortunately, success is not a guarantee and there are as many stories of disappointment as there are of successful integrations.  Merger and acquisition discussions usually focus on partner, service-line, location expansion or staff compatibility, leaving information technology components to be addressed at a “later, appropriate” time.  More often than not, technology compatibility is discussed too late in the discussions resulting in conflict and expensive mistakes that should have been resolved before signing.

Whether your firm is looking to acquire another practice or to make your firm more attractive to a potential suitor, it’s important to incorporate IT considerations into the negotiations and have agreement on all applications to be utilized and an agreed-upon transition schedule to have everyone under the “one firm” banner.  Below we list our top Information Technology items to consider including into your Merger and Acquisition checklist, so firms can truly access their practice compatibility and be aware of potential licensing or upgrade pitfalls.


Departmental Application Listing:

Firms should create a side by side listing of all application licenses for each office by department, the number/type of licenses and whether they are Cloud-based, Server-Based or licensed to individual workstations.   Any contracted agreements for licensing beyond a year should be disclosed as these can be near impossible to get out of and can create an unexpected liability.  The overall intent of this spreadsheet is to create a single firmwide listing of standardized applications that everyone will agree upon as well as the time table to convert to the standard (and penalties for not complying).

  • Firmwide: Practice Management, Document Management (with document retention expectations), Portal/Secure Email for client communications as well as tools utilized for internal CPE, PTO, and HR/performance review tracking.
  • Productivity: Microsoft Office/Email versions (and any email file size limitations), Microsoft Windows versions, Adobe/PDF versions/licensing and be cognizant that many of the applications will be transitioning to annual licensing. Collaboration tools such as Intranet, Instant Messaging, Screen Sharing, Video Calling (think Skype, Slack, Zoom, Teams, and Yammer).
  • Tax Production: Individual/Business Returns, Workflow/Due Date, Projections, Fixed Asset, Research, Federal-State-Payroll, and Other Tax Forms. For paperless tax production firms should standardize Tax Return scanning, bookmarking and optical character recognition applications including any outsourcing commitments, PDF/Annotation, and Digital Signature. We have found that one of the key tax compatibility indicators is the median pricing of each firm’s individual returns which should be in a similar tier.
  • Audit and Accounting: Engagement Binder, Trial Balance, Workpaper Programs, Financial Statement Creation, Client Portal, QuickBooks and other supported accounting/payroll and 1099 applications. Auditors are also utilizing data extraction and data analytics tools as well as their own portal solution to promote digital audit production.
  • Network Infrastructure: Server Licensing and Renewal, Password/Multi-factor Authentication, Anti-virus, Malware, Intrusion Detection and Prevention, Internet Monitoring, and Help Desk Support.
  • All Other: Website, Marketing lists, Customer Relationship Management (CRM) applications, and unique departmental applications.


Hardware/Equipment Listing:

Minimum standards and expected replacement times should be discussed so the firm is not surprised by an expensive workstation, network storage, cabling or Internet Service provider upgrades. The implementation date for each piece of equipment should be listed to calculate the expected replacement date.  In our experience firms operating in a traditional on-premise network environment get three years life out of laptops, four years out of desktops, and five or six years out of server components depending on utilization, capacity, and availability of support agreements.  Firms operating either with all applications in the cloud or in a server-based computing environment usually get an additional one to three years usage out of their workstations.  To minimize surprises of undocumented applications that need to be supported, tools such as Spiceworks and Belarc Advisor can digitally crawl through the entire network and make a listing of all applications and versions as well as point out potential security risks.

  • Minimum Workstation Standards: Desktop vs. Laptop Standard including Solid State Drives (SSD), Processor (i5/i7) RAM (4Gb-8Gb Cloud, 16Gb Tax), and Number/Size of Displays. You will also want to identify the workstations that will need to add additional monitors to get to the firm standard and whether or not a docking station or other hardware will be required to handle the firm display standard.
  • Server/Network Equipment: Servers, Routers, Gigabit Switches and Cabling, Uninterruptible Power Supplies, WiFi/Wireless Access routers.
  • Communications: Redundant Internet availability, digital cellular contracts for smartphones and MiFi/Jetpacks, Telephone System compatibility as well as digital fax requirements.
  • Remote Access Applications: Virtualization licenses, Remote Access (RDS/WTS/Citrix), Remote Control (Teamviewer, LogMeIn), as well as any other Network Utilities.
  • Ancillary: Production and Individual Scanners, Duplicators, supported Smartphones, Tablets, and remote workstations.


IT Staffing/Application Expertise:

When merging firms, it is also helpful to have an understanding of how IT support is currently being provided through internal/external IT technical helpdesk personnel including any long-term support/licensing contracts, as well as accounting application expertise to help with adoption of new applications.  If the transition requires a data conversion and is close to year-end, be sure the application vendor has availability to convert data as year-end is the busiest time for these transitions and available dates get booked up early

  • IT Staffing: IT Personnel listing with skills/expertise, External Support contracts including cost and hours utilized along with long term contracts.
  • Expertise Listing: Identify internal application expertise as well as external training resources (individuals and vendor/external training resources to verify availability of training following the transition).
  • IT Policies: Computer and Internet usage/BYOD-home use, Security/Password Policies.
  • Disaster Recovery: Offsite backup, Disaster Recovery Resources including contracts for Disaster Service Providers.


While this is not an all-inclusive list, it will help firms started on incorporating the right IT considerations into discussions to minimize the risk of unpleasant surprises that could harm the potential success of the merger. Our experience has found that firms should target six months to have the acquired practice integrated into the overall single firm list of applications and to never allow the merged in firm to go beyond twelve months without substantial penalties be assessed for not transitioning.


This article was originally published for CPAFMA. Copying or distribution without the publisher’s permission is prohibited.

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