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Its immediate AI plan is deliberately practical: give every employee access to Anthropic’s Claude, identify repetitive work that can be standardized, and measure whether automation raises output per employee without weakening audit quality.
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What is happening at Smith + Howard?
The Information reported on October 14, 2026, that Smith + Howard was preparing another acquisition round, with two deals potentially closing before the end of the year. The move continues a buy-and-build strategy that began during the firm’s relationship with Broad Sky Partners and is continuing under TPG’s ownership backing.
TPG announced its investment on June 9, 2026, saying the capital would support national expansion, technology, talent, client-service capabilities and AI integration. Financial terms were not disclosed. The announcement said the transaction was expected to close in the third quarter of 2026, subject to customary conditions and approvals. By the October report, Smith + Howard was being described as TPG-backed.
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Smith + Howard provides accounting, assurance, tax, advisory and wealth-management services. It had more than 800 employees across Alabama, Georgia, North Carolina, South Carolina, Tennessee, Texas and Virginia, and expected approximately $175 million in 2026 revenue. Excluding acquisitions, management said revenue had grown about 10% to 15% annually for the previous decade.
How large could the next acquisition wave be?
Management expects acquisitions to add roughly 20% to 25% of 12-month forward revenue. The firm is also considering a broader target range than it used previously.
| Acquisition measure | Figure or range | Qualification |
|---|---|---|
| Potential closings in 2026 | Two deals | Management expectation reported October 14, 2026; timing was not guaranteed. |
| Additional acquisition activity | More deals planned for 2027 | Part of the continuing expansion strategy. |
| Target annual revenue | $5 million–$50 million | New range under consideration. |
| Earlier target range | $2 million–$20 million | Range used before the proposed expansion of deal size. |
| Expected revenue contribution | 20%–25% of 12-month forward revenue | Management’s acquisition ambition, not a completed result. |
Why the target range matters
A $5 million to $50 million revenue range reaches beyond very small practices and could bring in firms with established client books, specialized expertise or stronger local positions. The trade-off is integration risk: larger practices may have more systems, partners and operating habits to combine.
The Information also described market valuation differences. Smaller firms with sound client bases but limited technology or marketing capabilities could fetch EBITDA multiples around five to six times, while established firms taking direct private-equity backing were approaching 12 times EBITDA or higher. Those figures are market observations in this transaction context, not a universal price guide for every accounting practice.
What is Smith + Howard’s AI strategy?
Smith + Howard rolled Anthropic’s Claude out to all employees rather than restricting experimentation to a specialist team. The goal is to let staff test workflows and propose useful applications from the ground up.
Start with repetitive work
CEO Sean Taylor described the first opportunity as work with “a lot of lather, rinse, repeat.” That points to tasks with predictable inputs, repeatable rules and substantial manual handling. Early candidates include simpler or industry-specific audits, where standardized procedures may be easier to encode than the judgment-heavy portions of a complex engagement.
Keep complex financial-statement audits in the harder category
Management expects complex financial-statement audits to be more difficult to automate. These engagements involve professional judgment, unusual transactions, evidence evaluation and responsibility for a signed opinion. Claude access does not mean those audits can be handed over wholesale to software; it gives teams a tool to test assistance, drafting and workflow acceleration while people retain review and accountability.
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The firm is evaluating AI-enabled products that it could offer clients, in addition to using AI internally. It is also searching for a C-suite executive to lead its AI efforts, a sign that the program is intended to become an operating capability rather than a collection of informal employee experiments.
How will TPG and Smith + Howard judge AI returns?
TPG’s primary measure is revenue per employee. For accounting operations, TPG managing director of AI Brian Goffman suggested examining how many audits a given employee can complete. Those metrics connect automation to capacity and growth instead of treating the number of AI licenses as the result.
Smith + Howard tracks return on investment month to month. Before deciding whether to build software internally, the firm includes expected AI costs and growth effects in five-year cash-flow projections.
| Decision question | Measure or method |
|---|---|
| Is the workforce producing more value? | Revenue per employee. |
| Is audit capacity improving? | Audits completed per employee. |
| Is the initiative paying back? | Month-to-month ROI tracking. |
| Should the firm build software? | Five-year cash-flow projections including implementation costs and expected growth. |
Goffman said private-equity owners may retain more of the savings created by AI instead of passing all efficiency gains to customers: “In accounting, that doesn’t seem to be the case.” He also said, “We’ll pay more than the other firm because we know we can create that value,” describing how AI potential can affect acquisition competition. Taylor’s assessment was more measured: “We are monitoring it, but we definitely feel like the return is going to be there.”
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The stated plan points to task automation and higher employee throughput, not an immediate replacement of accountants. The easiest starting points are repetitive procedures and standardized audits. Complex financial-statement audits remain harder because they depend on judgment, context and professional responsibility.
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- Employees receive the same general-purpose AI capability and can identify suitable use cases.
- People remain responsible for reviewing outputs and meeting professional standards.
- Success is judged by capacity, revenue and cash returns rather than adoption alone.
- Work that cannot be reliably standardized is less likely to be an early automation target.
That approach could change the mix of work accountants perform: less manual preparation and more exception handling, review, client communication and judgment. The available plan does not establish a timetable for reducing headcount or eliminating specific roles.
How does this fit the wider private-equity push?
Smith + Howard is part of a broader effort to consolidate professional-services firms and use technology to improve margins. TPG has relationships with Anthropic, Microsoft and Google, which provide context for its AI strategy, but those relationships do not establish that Smith + Howard uses every one of those companies’ products.
The Information reported that Smith + Howard was not then a customer of OpenAI’s private-equity venture, although that could change as the venture expands its technical capacity. The firm’s disclosed strategy therefore centers on broad employee access to Claude, internal workflow experiments, possible client products and disciplined financial measurement.
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What to watch through 2027
- Whether the two potential 2026 acquisitions actually close and how their revenue compares with the firm’s target range.
- Whether Smith + Howard expands acquisitions toward $50 million-revenue targets in 2027.
- Which audit or accounting workflows move from experiments into repeatable production systems.
- Whether revenue per employee and audits per employee improve without compromising audit quality.
- Who takes the proposed C-suite AI leadership role and what authority that executive receives.
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