Once again I’m in the middle of a deal where the seller treats accounting like a weak little step-sister. Garbage in-garbage out syndrome, co-mingling businesses, no controls, blending of the business and personal checkbooks, etc.
Solid financial systems and (therefore) accurate financial statements are one of my four top things an owner can do to increase value and prepare for a sale. After the run of mangled financial statements I’ve seen this year it’s my number one reason, with a bullet. Set the accounting up correctly, keep in under control, and you’ll spend less money than having your accountant correct it every year and have to adjust it when the business is sold.
FYI, my other top things business owners/sellers should do are 1) Show you can grow, don’t just say it, 2) Get rid of dependencies, especially on the owner (lots of those this year too), and 3) Prove you can attract and retain good people.