Today’s economy and changing demographics have provided more access to capital and opportunities for small and medium-sized businesses to grow or to sell. Sellers performing their own due diligence can protect value, shorten the sales process, and present confidence to prospective buyers. Seller diligence can range from preliminary valuation, risk assessments, reviews or compilations, or quality of earnings reports. A traditional quality of earnings report includes areas such as adjusted earnings analyses, accounting policies, financial ratios, customer concentrations, and working capital (among others). For small and medium businesses, however, quality of earnings reports may be tailored to address specific risk areas, such as human resource policies, technology risks, management depth, or pro forma and projected financial information.
Benjamin Franklin said, “a penny saved is a penny earned.” This can be translated to business owners performing their own seller diligence as, “a penny spent is more than a penny earned.” Here are three reasons business owners can benefit by engaging a professional services firm to conduct seller diligence:
P&N is a full-service accounting and advisory firm, ranked in the Top 100 accounting firms in the United States. With offices in Baton Rouge, Lafayette, New Orleans and Houston, we serve middle-market companies in the Gulf South and across the country. Our dedicated team of valuation and transaction professionals has experience to help businesses navigate the diligence process. Moreover, our breadth of experience as a full service firm allows us to customize our services to your needs, including tax, audit, internal audit, human resources, and technology.