Organize your financial statements and make sure you are properly recording accounting entries, consistently from year to year, within proper months, and generally according to GAAP.
What can I do to prepare for a sale?
By Adam Friend | Senior Vice President of Business Development
In general, you should always run your business as if you’re going to own it forever. However, if you are contemplating a sale in the not-so-distant future, it could be helpful to consider the following:
If feasible, have an outside accountant compile, review, or even audit your most recent financial statements.
Record monthly outstanding accounts receivable and accounts payable balances every month. These will be useful in the event there is a working capital target in the transaction.
Clean up old accounts receivable and write off uncollectible accounts.
Keep detailed track of personal, non-recurring, and owner-related expenses that are running through the P&L. Buyers will want to see a clean P&L once there is no longer the ability to have those expenses run through the business.
Gather key contracts, organizational and legal documents, and have electronic copies available.
Spring cleaning – clean out your paper and electronic files for what is no longer needed for the business.