Mergers and acquisitions (M&A) in the accounting industry are experiencing record momentum. According to Capstone Partners and Madras Accountancy, the number of M&A deals among accounting firms has surged to record levels, driven by succession planning needs, talent shortages, and aggressive growth strategies.
Consider Archer Lewis—a firm making headlines with plans to acquire 75+ accounting practices over the next three years. Their CEO, Jake Nice, revealed their success formula:
“As we scale our own business and rapidly acquire accounting practices, we chose Rightworks to power our mission-critical tax and accounting applications, manage our IT infrastructure, and protect our data. The partnership enables us to focus on what we do best: deliver high levels of service and acquire new companies to grow.” Jake Nice, Archer Lewis CEO
Why Accounting Firm Mergers Fail
While Archer Lewis demonstrates how technology can enable rapid growth, they’re the exception rather than the rule. Harvard Business Review research shows that 70% of mergers fail—and IT integration is consistently cited as a primary culprit.
The Problem: Technology Misalignment Can Derail Even the Strongest Deal
When two accounting firms merge, leaders often focus on cultural alignment, client retention, and operational synergies. But technology is the quiet deal breaker that can make or break the transition.
Hidden Integration Costs
Technology incompatibility creates a cascade of unexpected expenses:
- Maintaining redundant software licenses
- Upgrading outdated servers
- Retrofitting incompatible systems
What looks like a financially sound transaction on paper can erode margins and hemorrhage hundreds of thousands of dollars in the first year alone.
Client Service Disruptions
Consider this scenario: Two firms use different tax platforms, audit documentation systems, and client portals. Transferring clients becomes a logistical nightmare featuring:
- Missed deadlines
- Lost documents
- Access protocol confusion
- Damaged client trust
Staff Productivity Plummets
On the staff productivity side, employees often face steep learning curves when required to switch tools overnight. Even the most experienced accountants can lose valuable billable time navigating unfamiliar systems, leading to frustration and decreased morale.
Security Vulnerabilities Spike
Integration periods are prime targets for cyberattacks. Without unified security protocols—including access controls, data encryption, and incident response plans—firms unknowingly expose sensitive financial data and client information.
With intentional planning and a structured approach to IT integration, these risks are avoidable.
7 IT Strategies to Prevent M&A Failures
1. Pre-Merger IT Assessments
A successful M&A starts before the ink dries. Conducting a comprehensive IT assessment as part of due diligence can reveal potential landmines early.
Key components include:
- Hardware inventory evaluation: Identify servers, workstations, and networking equipment to assess upgrade or replacement needs.
- Software licensing audits: Document all accounting, tax, and productivity software to uncover overlaps and compliance gaps.
- Network infrastructure analysis: Examine connectivity, bandwidth, and security configurations to ensure scalability.
Pro tip: Use standardized IT assessment checklists to ensure nothing falls through the cracks. Establishing a clear baseline prevents six-figure surprises post-merger.
2. Technology Stack Standardization
Standardizing technology platforms is the fastest path to operational efficiency post-merger.
Benefits of unified platforms:
- Eliminate duplicate data entry
- Simplify reporting processes
- Reduce software licensing costs
- Accelerate employee training
- Enable consistent client experiences
Firms that prioritize standardization report faster post-merger stabilization and significantly reduced IT overhead.
Download → M&A Technology Due Diligence Checklist
3. Data Migration and Security
Data is the lifeblood of any accounting firm. Poorly planned data migrations can lead to compliance issues and operational chaos.
A sound migration strategy should include:
- Client data protection during transfers: Use encrypted channels and secure transfer protocols.
- Compliance maintenance strategies: Align migration processes with regulatory requirements, including those from the IRS and FINRA, where applicable.
- Backup and recovery planning: Establish rollback protocols to safeguard against data loss during the transition.
Remember: One data breach during integration can destroy decades of client trust. Prioritize security at every step.
4. Unified Communication Systems
Fragmented communication creates unnecessary barriers between merging teams. Consolidation is crucial for creating a “one firm” culture.
Key integration points:
- Email system unification
- Document management consolidation
- Client portal integration
- Internal collaboration platforms
Unified communication reduces versioning issues, improves response times, and reinforces cultural integration.
5. Scalable Cloud Infrastructure
Cloud technology has evolved from nice-to-have to mission-critical for M&A success.
Cloud advantages for growing firms:
- Flexibility: Scale infrastructure without capital expenditures
- Accessibility: Enable seamless collaboration across locations
- Resilience: Built-in disaster recovery reduces downtime risks
- Integration: Simplify future acquisitions with standardized platforms
As Archer Lewis has proven, a scalable cloud environment allows firms to integrate more smoothly and adapt quickly to future acquisitions.
6. Security Protocol Establishment
M&A events create openings for cybersecurity threats, making a strong security framework non-negotiable.
- WISP alignment strategies: Align policies with a comprehensive Written Information Security Plan, a key expectation under regulations in many states.
- Access control harmonization: Standardize permissions and authentication processes to limit exposure.
- Compliance requirement mapping: Ensure security practices align with regulatory and industry standards such as those recommended by NIST.
Unified security protocols protect client data and preserve your firm’s reputation during vulnerable transition periods.
7. Technology Integration Timeline
Finally, a structured integration timeline helps firms manage change effectively.
Timeline best practices:
- Phase integration: Tackle systems in priority order
- Define milestones: Set clear deadlines for migrations and training
- Track success metrics: Monitor adoption rates and incident volumes
- Communicate progress: Keep all stakeholders informed
By setting clear expectations and pacing change appropriately, firms can maintain operational continuity while achieving their M&A objectives.
With M&A Comes Risk—Here’s How to Lower Yours
The accounting industry’s M&A boom presents tremendous growth opportunities—but only for firms that prioritize IT integration. By implementing these seven strategies, you can:
- Protect your investment
- Enhance staff and client experiences
- Build a foundation for sustainable growth
- Position your firm for future acquisitions
Whether you’re acquiring, being acquired, or planning future expansion, proper IT planning ensures your next deal strengthens your foundation rather than exposing hidden weaknesses.
Ready to ensure your firm’s technology supports rather than sabotages your growth plans? Start with a comprehensive assessment of your current infrastructure and identify gaps that could derail future M&A success.
