Your Accountant should help with Due Diligence



Due Diligence is usually carried out by the buyer. It is normally done in conjunction with your accountant and other business advisers. You may need their help to assess some of the technical, or financial areas such as the accounting and financial records.

The amount of due diligence carried out will depend on the size of the business and what is required. Many potential business deals fall over during due diligence because things can be revealed that the potential buyer is not happy with.

Often the financial records show a different picture from what the seller had previously indicated, or things such as old stock, poor equipment, or disgruntled employees can put a potential buyer off.

Unfortunately, many business owners make false representations or supply incorrect statements as to the operation, or state of their business. This comes about because they want to show the business in the best light and obtain the best price.

However, when the buyer’s accountant reviews the overall business and its financials, many facts and figures can be revealed that don’t line up with representations made.

Some of the things that your accountant mus...

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