Selling your business can be a complex process, and there are many factors to consider. One of the most critical aspects is ensuring that your financial statements are in order and readily available for potential buyers. Unfortunately, some business owners make the mistake of not discussing this issue with their accountants ahead of time, and it can end up costing them the sale.
One of the most common issues that arise during the sale of a business is the inability to provide timely and accurate financial statements to potential buyers. This can be a significant red flag for buyers, and they may lose confidence in the transaction if they are not provided with the necessary financial data. As a result, it is crucial to discuss this issue with your accountant before putting your business on the market.
If you are not currently receiving timely monthly financial statements from your accountant, this could be a sign of trouble. The lack of regular financial reporting could indicate that your accountant is not up to the task or that there are issues with your company’s financials. In either case, it is important to address this issue with your accountant and make sure that you are receiving the necessary financial information.
Another issue to consider is whether your accountant’s software can export data in an Excel format. Most buyers prefer to receive financial statements in an Excel or .cvs format, as it makes it easier to analyze the data and perform due diligence. If your accountant’s software cannot export data in this format, it could create delays and lead to frustration for potential buyers.
If you have multiple companies, Financial Statements for each company will also be needed in addition to a consolidated financial statement that combines the financial data from all your companies. This is needed to validate the numbers on the tax returns. This can be a complicated process, so it is essential to discuss getting timely requested reports with your accountant ahead of time and ensure that you have all of the necessary data.
In conclusion, selling your business can be a challenging process, and it is essential to ensure that your financial statements are in order and readily available for potential buyers. By discussing this issue with your accountant ahead of time and making sure that you are receiving regular financial reporting, you can avoid costly delays and increase your chances of a successful sale.
If you would like a confidential conversation on how to prepare your business to be sold, receive the best price possible; and enable getting the transaction funded so you get all cash at closing, please call Bob Dolan at 954-579-4687, email bobd@dolansales.com.