In the last article we talked about a potential buyer for your business asking to see the books. If your stomach churned a little wondering about what they might find, then you should follow our advice and have a professional take an outside look quarterly or at least annually.
“But, I am not selling my business.”
Maybe not but there are other reasons why having an accounting checkup might make sense.
Some larger companies, government agencies and even non-profits might ask for copy of your financials before you can become a vendor. They want to make sure that if they work with you, you can deliver. They want to take a look under the hood and understand how inline your costs are with the market, what you cash-flow looks like and what reserves you might have.
No one wants to write a check to the company that is on the verge of going under. So big contracts sometimes come with requirements that (without an accounting check-up) you might not be able to fulfill.
Double checking accounting work is not uncommon. Public companies and most larger private ones have a quarterly and annual audit done. Companies looking to sell, merge or raising capital from investors or borrowing from a bank do it all the time – they bring in a third party that doesn’t know their business to look over the books and give an opinion on how things are running.
Imagine the project of a lifetime lands in your inbox and the last step is them asking to see your financials and you aren’t comfortable sharing those. Don’t let that happen to you, instead schedule a time an accounting professional that can give you an objective opinion on how your books are setup and how healthy your business is.
