The selling price will depend on a multitude of factors but once it's agreed with the buyer, when can you expect to receive payment?

Accountancy practices are usually purchased with a capital sum, and the payment schedule is often split over 12 months, or 24 months for larger practices. If split over 12 months, you may receive 50% payment on completion of the sale, with the remaining 50% after 12 months. If your practice is larger, the payment schedule may be split over 24 months with 30-40% paid upon completion of the sale, half of the remaining balance on the first anniversary of the completion date, and the other half on the second anniversary.

Most sale agreements will include a clawback clause that will allow the buyer to deduct a percentage of the remaining balance if any clients leave the practice during that period. A well planned transition, and a willingness to stay on post-sale to help with the transition, can help minimise the chances of a clawback claim.

You can negotiate a provision in the sale agreement that prohibits the buyer from raising the fees during the clawback period as that could trigger client departures. You should also consider negotiating a clause that gives you the right of discovery if the buyer does seek to reduce the balancing payment under the clawback clause. This will allow you to look at the relevant client files and even speak to the clients to ensure that any losses are legitimate.

Whilst accountancy practices are usually purchased with a capital sum, there is the less common "earn out" agreement. An earn out agreement can bridge a gap between what the seller wants to receive and what the buyer is willing to pay, and provides a level of assurance to the buyer. You sell the practice now, but are paid over a longer period of time out of the profits of the practice, and purchase price payments may be conditional on the practice achieving performance milestones post-sale.