By Brian Smith, Co-founder and Managing Partner
Few moments test an organization’s readiness like financial due diligence. Whether you’re raising capital, selling your business, or acquiring another, how you present financial information can make or break buyer confidence.
What Do Buyers Look For?
Buyers want accuracy, consistency, and transparency. They expect reconciled financials that tie to tax returns, bank statements, and management reports. Discrepancies, no matter how small, raise questions and slow the process.
How Should Companies Prepare?
- Organize documentation – Ensure P&Ls, balance sheets, and cash flow statements are complete and consistent.
- Reconcile key accounts – Align intercompany, inventory, and accrual balances.
- Document accounting policies – Be ready to explain revenue recognition and expense treatment.
- Validate KPIs – Support margin, retention, and growth metrics with data.
- Engage advisors early – Experienced diligence professionals can anticipate and resolve issues before buyers find them.
Why is Preparation So Critical?
Organized, audit-ready financials not only speed the diligence process but also signal operational discipline, which is a key factor in valuation. LCG helps clients transform financial complexity into clarity and confidence.
For support preparing your financials for due diligence, contact Brian Smith at [email protected].