Integrating Acquisitions: From the Trenches

Ashley Aponte is a Consulting Associate at Rosenberg Associates, where she helps the consulting team deliver exceptional client service. She has extensive experience in the accounting industry and a background in performing administrative, accounting, and project management tasks in small to medium-sized CPA firms.

The partner meetings have gone great, the book of business looks promising, and the prospect of a merger and acquisition is tantalizing—but it’s no secret that the integration is a sizeable project of its own.

Mergers and acquisitions are more than just signing contracts for financial gain and firm growth; they can also lead to changes in culture, technology, policy, and process. Those can be great improvements—or poisonous if not handled properly.

While working in a small accounting firm for 10 years, I assisted the managing partner on eight mergers and acquisitions, and we grew to a mid-sized firm. During that time, I learned there are essential issues to consider when planning for a major firm change.

Considerations Prior to Finalizing the Acquisition

(1) Culture changes

• Every company has their own core values, guiding principles for setting company goals, job expectations, and performance standards. Before inviting a new team to your establishment, it is important to assess their core values and the motivational factors of the owners. A lack of alignment between the leading personalities can be disruptive.
• It is helpful if partners or firm administrators meet with partners, team leaders and managers beforehand to get a deeper understanding of how they work, what makes their workday better, and what they are hoping won’t change.

(2) Policy and process changes

• Both parties to a merger or acquisition should thoroughly review each other’s employee manual. Although the buyer will most likely continue to run their company as they have been, it is smart to discuss any potential issues.
• Employees may have strong feelings or even leave over changes to their vacation/holiday/sick time, pay/bonuses, or parental leave policies.
  • For instance, if the selling company usually closes the office for the holidays at the end of the year and supplies end-of-year bonuses, but the new company does not give this time off and offers bonuses at a different time of year, employees may be disgruntled to read this in their new employee manual.
  • Sensitive topics should be agreed upon by partners and major changes discussed with staff early on. Transparency builds trust and avoids potential resentment.

(3) Technology

• All accounting firms utilize different technological resources, so it’s important to discuss:
  • Programs, software, applications, operating systems being used
  • Equipment including servers, PCs, screens, speakers, laptops, phones, cameras and headsets
  • Policies on equipment use and purchases
  • Policies and procedures for program/equipment maintenance, updates, security system/virus protection and backup solutions
  • Policies and capabilities of remote work as it relates to technology.

This information enables the buyer to consider costs associated with updating and/or changing technology as well as scheduling time with IT support to set up new employees, servers, and equipment in a timely manner.

• Discussing technology uses could potentially open the buyer’s company to enhancements they previously had not considered.
• Changes to technology could also mean scheduling training time for the incoming partners, managers, and staff.

(4) Physical aspects

• How offices are set up—paperless vs. filing cabinets, offices vs. cubicles, aesthetics—should be considered and planned for prior to a merger or acquisition. If the buyer is paperless and the incoming firm is not, then not only do the new employees need to learn the new process, but the buyer company needs to consider how many years of paper files you want to digitize, who will scan everything, where the documents will be stored, how the paper documents will be disposed of, and what the timeline is.

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Considerations for Integration

(1) Ways to maintain and improve company culture:

• Make core values clear to everyone. Distribute a list and/or hang a poster stating the company’s core values. Highlight where values from the acquired company overlap to enhance a sense of commonality.
• Plan ice breakers. Holiday parties, cocktail hours, game nights or weekly group lunches are great ways for everyone to get to know each other and create enjoyment in the workplace. These can also be hosted virtually!
• Have everyone take strength or personality assessments and share the results. Assessments such as the Gallup CliftonStrengths assess what makes each person unique and the skills they bring to the workplace. This is great for people to see the potential and strengths in their colleagues.
• Have a company retreat. Consulting companies will host retreats where partners, managers and staff can work together to invigorate the company’s core values, address any issues, and create goals for the company’s future.

(2) Training

• Every accounting firm uses different programs and processes to get work assigned, reviewed, and completed. It is important to schedule training for new programs, technology and processes. Having written procedures for the various processes and a firmwide accountability chart is helpful to new partners, managers, and staff.

(3) Physical aspects

• If the seller is getting rid of their current office space and needs to dispose of furniture, the buyer needs to consider the options and costs related to each.
  • Consider donating or selling the furniture, the cost of moving the furniture or the cost of disposing of the furniture.

• When bringing in new partners and/or staff, seating arrangements should be planned ahead of time and prior setups should be considered. Employees may have strong feelings regarding their seating arrangements that need to be discussed before coming into the office.

Change is not always comfortable; however, proper planning can make all the difference. During mergers and acquisitions, it is easy to get distracted by the excitement and/or stress of the situation but considering these changes and steps will help avoid any potential issues.