Mergers and acquisitions are messy. Are your financial books ready for another company to look at, for purchase? Or, are you planning on acquiring another company, and want to make sure its books are correct? Or, have you already merged with another company, and want to amalgamate financial books? We’ll tell you, these are very complicated and challenging bookkeeping processes that will require an expert’s attention.
What mergers and acquisitions need is for an expert bookkeeper to look at every single entry of the financial books of the business to be acquired, to make sure the numbers are recorded correctly in the right accounts; meaning, the figures in each account, including cash, receivables, and payables should all add up. There shouldn’t be a list of unaccounted for items in a miscellaneous column. You won’t guess how many businesses have a “don’t know” column, where they’ve entered figures for incoming or outgoing moneys they haven’t accounted for.
Just a tip, every expense should fit somewhere; try not to have a huge miscellaneous column of numbers. If you are acquiring a company that has too many miscellaneous business expenses, have a bookkeeper look at it in advance to make sure everything is in order before you go ahead with the purchase.
When a business owner is sure of his business’s revenue potentials, the books should show it. If not, you’ve got a lot of guesswork on your hands. Also, this affects the cost of the business. A business that clearly, and with good evidence shows a consistent intake of high revenues is a sought after one. The business that has potential for high revenues but has been keeping incomplete numbers or incorrect accounting will not sell as well.
Faulty financial figures in bookkeeping columns will create problems for a business owner, who wants to merge or be bought, and for the party doing the merging and buying. To make sure a merger and acquisition is a smooth transaction, make sure your bookkeeper is part of the process early. Facets Business Solutions is here to help, if you need it.