With tax day recently come and gone, as a small business owner you might think your your bookkeeping responsibilities can take a back seat for a while. They shouldn’t, and if you’re considering selling your business anytime in the near future they definitely should be kept front and center.
Selling your business is a big responsibility that takes a great deal of time and energy. You don’t want to be in the midst of the selling process and realize that your books won’t hold up to careful scrutiny by a buyer. The value of the business and the validity of your listing price are dependent on withstanding that scrutiny. A jumbled stack of paperwork isn’t going to cut it.
Boxes of receipts need to be sorted, scanned and accounted for. Contracts should be kept in one place and kept sorted. Employee documentation should be organized in some fashion. Tax documentation should be legible and organized as well. Current P&L statements should be kept with frequently pulled P&L statements that show your business as it fluctuates month to month and year over year. You get the idea.
Imagine the stress of trying to compile and organize all of this documentation while in the midst of the sales process, particularity if some sort of personal crisis is forcing you to sell quickly. Losing the all-important first impression with a prospective buyer because your ducks weren’t in a row is 100% preventable. So is keeping your stress level to a minimum during the selling process.
You can avoid this particular pitfall if you get your books in order now and keep them that way. If you haven’t been keeping track of your business accounting, then buying accounting software or enlisting the help of a business account can be extremely important in helping your business put it’s best foot forward when you decide to (or need to) sell. Showing up to the first meeting with buyers with neatly collated binders and files will show that not only do you care about your business, you’ve been keeping up with everything that’s important. Prioritizing your books will speak volumes about what kind of business owner you’ve been – and the health and potential longevity of the business overall.
Another note: Use a business CPA or a business transaction accountant when you are going through your books. Someone who has never assembled the paperwork of a small business is not going to understand the nuances of getting your business books in order. If you need help finding someone, your business broker will be able to point you in the right direction.
No one likes to do paperwork, but if you own a business and want to sell it someday – you’re going to need to get that paperwork in order. If you need help, talk to a business broker about what you would need to do to get your business paperwork ready for buyer’s eyes.
Did this article resonate with you because you have a huge box of unorganized paperwork under your desk? Would you like to know more about what documentation buyers are going to want to see? Do you need help getting your business ready to sell? Please contact us today or leave any questions or comments here, we would be happy to help.