20 Golden Nuggets
Part 11. Preparing for Due Diligence - Clean Up Your Books
Due diligence is one of the most intense and thorough parts of any sale process. Buyers will want to scrutinise every aspect of your business to ensure they aren’t walking into hidden risks. One of the biggest red flags for buyers is messy financials, so it’s essential to have your books in impeccable order.
Start by working with your accountant to ensure all financial statements, tax returns, and records are accurate, consistent, and easy to understand. Any discrepancies or unusual transactions will raise questions during due diligence, so address these now.
You’ll also need to gather key operational documents, such as supplier contracts, leases, employee agreements, and any legal paperwork related to the business. Buyers will want to know that everything is in order and that there are no looming issues.
Golden Nugget - Well-organised, transparent financial and operational records are essential to surviving due diligence. Clean up your books before entering the sale process.