how cpas are using ai to boost ebitda multiples.
by 卡塔尔世界杯常规比赛时间
private equity investors are paying higher prices for cpa firms that deploy artificial intelligence to expand capacity, deepen professional benches, and systematize growth—rather than cut headcount.
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“if ai were about to replace accountants and advisors, private equity wouldn’t be pouring billions into the sector,” taxdome founders ilya and victor radzinsky say in a public letter to stakeholders.
as dealmaking accelerates into 2026, the shift helps explain why valuation multiples for accounting firms continue to rise even as automation spreads through tax, audit, and advisory workflows. private equity sponsors and strategic consolidators have completed hundreds of acquisitions of cpa firms since 2020, often at valuation multiples that would have been rare a decade ago.
premium multiples are increasingly going to firms with repeatable processes, scalable operations, and leadership depth that extends beyond a single owner. what appears at first glance to be a contradiction—technology that boosts productivity without shrinking payrolls—has instead become a defining feature of how firm value is now created and priced.
“ai is not intended to reduce headcount; it is intended to increase leverage,” says bob lewis, president of pe m&a advisory firm the visionary group, in commentary included in the taxdome founder letter.
valuation is about enterprise depth, not solo efficiency
in its annual report, taxdome draws a sharp distinction between firms optimized for short-term efficiency and those built for long-term value. buyers, the founders argue, are not paying premiums for solo practices running lean with software agents. they are paying for organizations that can scale.
“a $5 million firm with clear processes, stable client relationships, and a well-supported team often commands a far higher multiple than a $1 million solo practice,” the founders write.
firms that depend heavily on a single rainmaker or lack documented workflows are more difficult to integrate, grow, and resell. ai can improve margins in those firms, but it does little to improve transferability.
“while a solo firm with agents may sound great for linkedin, it’s weak for multiples,” lewis says. ai is becoming valuable not as a labor substitute but as a force multiplier—raising revenue per professional while preserving the organizational structure buyers want.
capacity, not demand, is the binding constraint
one of the strongest arguments in taxdome’s report is that accounting firms are not facing a demand problem. they are facing a capacity problem. “many successful firms report turning away clients, not due to lack of demand, but due to lack of capacity,” the founders say.
卡塔尔世界杯常规比赛时间 data supports the taxdome assessment. employment in accounting, tax preparation, bookkeeping, and payroll services now exceeds 1.16 million. employment of accountants and auditors is projected to grow about 5 percent through the mid-2030s—faster than the average for all occupations. at the same time, lower-skill bookkeeping and clerical roles are projected to decline, reflecting automation of routine tasks rather than a collapse in professional demand.
suggesting “the talent leaving corporate america becomes tomorrow’s client list,” taxdome notes americans filed 5.2 million new business applications in 2024—about 1.7 million more than in 2019, a 49 percent jump, adding, “digital storefronts such as shopify can be launched in an afternoon, and ai tools slash the cost of a first prototype or marketing plan.”
the implication for valuations clearly supports firms using ai to serve more clients with the same—or larger—teams, thus increasing revenue without hollowing out their labor base. firms that use ai primarily to cut staff may improve margins, but they risk constraining growth.
taxdome’s founders argue that ai is reshaping firm structure, not dismantling it. the traditional pyramid—where many juniors support a narrow partner group—is flattening as automation absorbs manual work. but juniors remain essential.
as ai becomes embedded in workflows, judgment matters more, not less. entry-level professionals trained in ai-enabled environments can advance more quickly into client-facing and managerial roles, thereby shortening career paths and strengthening succession planning. firms with visible next-generation leadership command higher valuations than firms dependent on a retiring partner cohort.
client-to-staff ratios are rising—and buyers know it
in client accounting services, a 10-to-1 client-to-staff ratio has long been considered standard. with workflow automation and ai, taxdome argues, that ratio can double again in well-run firms.
that shift is not limited to cas. tax-focused firms already operate at higher ratios, and those ratios are rising further as intake, document handling, and communication become increasingly automated.
higher ratios translate directly into higher revenue per employee—a metric closely watched by private equity investors. but those gains only persist when firms retain the professionals needed to manage complexity and relationships. investors are betting on firms that combine people, process, and technology into scalable platforms. ai, in that model, supports growth by increasing leverage, not by eliminating expertise.
that logic helps explain why buyers continue to pay premiums for firms with advisory depth, industry specialization, and client trust—even as automation accelerates.
taxdome warns firms that using ai primarily as a cost-cutting tool may weaken the very attributes buyers value. reducing staff too aggressively can erode succession planning, reduce operational resilience, and limit growth capacity. those weaknesses may not show up immediately in margins, but they surface quickly in valuation discussions.
firms can use ai to shrink or to scale. the market, so far, is rewarding those who scale.