If you have checked out the ‘How we can help’ section of our website you will have noticed we offer more than preparing financial accounts and tax returns. In this blog, we cover a few of the other important ways we help businesses.
Due Diligence
We’ve been helping clients with their purchase of businesses recently in the retail industry, and also the biosecurity training space.
This involved reviewing and evaluating the financial statements and other information presented to us by the vendors accountant, and completing our due diligence checklist for our client. Our due diligence checklist covers everything from the basic must do’s like reviewing the prior years financial statements and financial projections if they’re available/ GST return information / Income Tax returns / to review of employment agreements and other business agreements such as lease terms.
And then there’s the financial advice that comes from that review!
Financial Projections
Quite often we’re asked to complete Financial Projections for our clients. The reasons for it are numerous but we are seeing that banks are requesting this information more so than in the past. Whether it be in relation to the request for finance for a new business purchase ( as we did for our retail client above ) or whether it’s for internal management reasons.
Whatever the reason, we find that the most successful businesses have Financial Projections, and they compare their actual financial performance to their projected financial performance using their Financial Projections. If the actuals don’t line up they take action to fix the problem. It’s the old adage, if you don’t measure, you can’t manage your business. We like dealing with our successful clients, and that’s why we recommend that all our clients have Financial Projections.
Valuations
We have recently completed indicative valuations for a number of clients businesses, and the most common reason is succession planning. Clients are selling a percentage of their shareholding in their companies to their employees who they believe have the business nous and drive / ambition to help move the company forward. The valuation provides a price range where we think the value of the business sits, and negotiations as to final price for a share sale are instigated on that basis. It’s a valuable tool to ensure that seller and buyer have a sound financial basis for a share sale.