Alliance Accounting Sales - The Purchase Process

11516 W. 183rd St.
, NW
MARTIN D. STANISZEWSKI
CPA, CVA, MBA, MST Orland Park, IL 60467
www.allianceaccountingsales.com phone: 708.478.3336
mstan@allianceaccountingsales.com fax: 708.478.3046
The Purchase Process

Typical Steps in Buying Process:
The prospective Buyer will call or register on-line with Alliance Accounting Sales and will need to sign
a non-disclosure form to view our Practices For Sale page.
A representative from Alliance will talk to the Buyer to determine what type and size of firm he/
she are looking for. Even if Alliance does not have a practice that matches the Buyerʼs objectives, we
can solicit firms in our database that may have an interest in selling their practice in the near future.
If the potential Buyer wishes to pursue a specific firm we have listed, Alliance will require the follow-
ing from the Buyer:
• A signed non-disclosure & confidentiality agreement

• A summary personal financial statement
• A signed agreement stating that the Buyer will pay 40% of the commission if he/she purchases one
of Allianceʼs listed firms.
After the above agreements have been signed, Reliance will:

• Discuss the qualifications of the potential Buyer with the Seller
If the Seller believes the potential Buyer is a serious Buyer and a good match for his/her practice, Alli-
ance will coordinate an introductory meeting with the Buyer and Seller. Alliance will make every effort
to have a representative at the introductory meeting.
If the Seller and Buyer wish to pursue the transaction, the Buyer will submit a non-binding Letter of
Intent that includes a refundable deposit. The Letter of Intent (along with Letter of Intents from other
potential Buyers) will be reviewed by the Seller. The Seller (through Alliance) may ask for adjustments
or clarifications to the Letter of Intent.
The Letter of Intent will normally include:
• Purchase Price
• Multiple
• Retention Period
• Assets to be Sold
• Down Payment
• Financing
• Timing of Transaction
• Assumption of Lease (if applicable)
I NTERMEDIARY & C O N S U LT I N G S E RV I C E S
Copyrighted 2008 Alliance Accounting Sales - MARTIN D. STANISZEWSKI. All Rights Reserved.
http://www.allianceaccountingsales.com
11516 W. 183rd St., NW
• Retention of Employees (if applicable)

• Other
If the Buyerʼs Letter of Intent is accepted, the potential Buyer will put a small deposit down
(as set forth on the Letter of Intent) and will generally have several weeks to perform due diligence
on the Sellerʼs books.
Due diligence typically involves reviewing the following documents:
• Client Lists and Billings (without client names)

• To verify $ per service and $ per client statistics
• A sample of client files and work papers (to review the Sellerʼs organization and competence)
• To review the Sellerʼs organization and competence
• Bank Statements (to verify cash sales ties to financial statements)
• To verify cash sales ties to financial statements
• Tax Returns for past three years
• Revenue by Service, By Month, By Year
• Fees Itemized By Service
• Payroll records if the practice has employees
• Listing of fixed assets that are to be purchased with the practice
• Owners Income & Perks
• Seller Discretionary Earnings calculation
Concurrent with performing due diligence, the Sellerʼs attorney is preparing a Purchase Agreement
for the Practice.
The Purchase Agreement generally includes:
• Specifies assets acquired and liabilities assumed

• Client files purchased (not listed until Close)
• Procedures for Closing
• Consideration
• Representation and Warranties of Seller
• Representation and Warranties of Buyer
• Restrictive Covenants Required
• Employment and Consulting Agreements Required
• Exhibits
• Contingencies to be completed prior to close
• Other Closing Documents (State specific)
11516 W. 183rd St., NW
Concurrent with due diligence and the drafting of the Purchase Agreement, the Buyer will need to
line up financing.
Alliance will work with the Buyer to obtain financing. Alliance will put together a loan package that
analyzes and organizes the entire transaction for the lending institution so that the Buyer will receive
a timely response to the Buyerʼs loan application.
Once all of the above steps have been completed, legal documents are prepared and the parties are
ready close on the sale of the practice.
Typical legal documents include:
• Purchase Agreement (see above)

• UCC filings
• Employment Agreements
• Non-Compete Agreements
• Promissory Note (if Seller Financed)
• Security Agreement (if Seller Financed)
• Corporate Resolution
• Bill of Sale
• Assignment of Client Files
• Pro-rations
• Exhibits
• Work In Progress/Receivables
• Lease Assignments
• Assignment of Other Agreements
• Close of Transaction
• Agreements are signed and checks are issued
Transition/Post-Close
This is one of the most important aspects of the transaction, yet it is often overlooked until after clos-
ing. Critical issues regarding the buyersʼ and sellersʼ responsibilities on a day-to-day basis must be
addressed such as:
Client retention – methods of assuring maximum client retention
The Seller and Buyer should have a common message to the clients as to why the practice was sold
and that the change will, for example, actually be positive for clients because of added services etc...
11516 W. 183rd St., NW
Sellerʼs responsibilities in the transition

If the owner stays on during the transition, his/her responsibilities must be clear to both parties
• Billable vs. non-billable compensation

• Authority for the administration of the office etc.
• Accounts Receivable and Work in Progress issues
Administration of the office
• Issues such as phones, e-mail, advertising, mailings...

• Employee retention
If staff is staying with the practice, the new owner should meet with each employee to understand the
employeeʼs role with the firm and discuss the firmʼs strategy going forward.
Other Transition issues

Alliance will work with the Seller and Buyer (on an hourly basis) on post-close, transition issues.

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11516 W. 183rd St.

The Purchase Process

• A signed non-disclosure & conﬁdentiality agreement

After the above agreements have been signed, Reliance will:

• Retention of Employees (if applicable)

• Client Lists and Billings (without client names)

The Purchase Agreement generally includes:

• Speciﬁes assets acquired and liabilities assumed

Typical legal documents include:

• Purchase Agreement (see above)

Client retention – methods of assuring maximum client retention

Sellerʼs responsibilities in the transition

• Billable vs. non-billable compensation

Administration of the ofﬁce

• Issues such as phones, e-mail, advertising, mailings...

Other Transition issues

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