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The role of an accountant when selling a business

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How can an accountant support a seller during a business sale?

When selling a business, a business broker will manage the business sale process from start to finish, including preparing your business for sale, valuing your business, and following the sale through to completion. Your business broker will work closely with your accountant in the lead-up to the business valuation to access essential financial data to calculate how much your business is worth.

We run through how your accountant can support the business sale process and your appointed business broker.

Responsibilities of an accountant when selling a business

During the lifetime of your business, you may have navigated your business under the wings of your accountant to carefully track financial health, operate in a tax efficient manner and increase company value where opportunity permits.

If you wish to now bring your business to a close, your accountant may likely be the first port of call for business exit planning and financial advice, alongside a business broker who will lead the business sale.

Your accountant may work with a preferred business sale supplier on a commission basis to provide specialist advice to clients and deliver a full-service. At Selling My Business, we are a trusted provider to the accountancy sector and work closely with many accountants to help achieve maximum sale value for clients.

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  • Sales value expectations and growth potential
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Your business transfer agent will liaise with your accountant to prepare the following information:

Company accounts: To begin the company valuation process, we require three years’ worth of company accounts. We will track company profits, debt levels and cash flow projections to assess the overall financial health of your business and profitability. Company accounts comprise profit and loss statement, cash flow statement and balance sheet.

   -       Profit and Loss Statement: A profit and loss statement will provide a snapshot of company revenue and expenses over the financial year. This can indicate future performance and help accurately gauge growth potential.

   -       Cash Flow Statement: A cash flow statement will track money moving in and out of the business throughout a selected period and illustrate if there is negative cash flow i.e. if you are spending more than you are earning.

   -       Balance Sheet: A balance sheet will feature a breakdown of company assets, liabilities, and shareholders’ equity. Your company assets will typically be made up of both short-term and long-term tangible and intangible assets. A healthy business will typically outweigh how much it owes (liabilities) with how much it owns (assets).

Financial and tax advice: If your accountant is a certified tax advisor, they may advise you on how to structure the deal, tax on selling a business and general financial planning advice.

Basic company information: Your business broker may request information in relation to the ownership structure of your business, such as share breakdown. If you have employees on the payroll, your accountant or payroll provider may be best placed to provide a breakdown of wages, salary, and other entitlements.

Due diligence: Before entertaining expressions of interest, you may wish to conduct due diligence to back up any claims and the financial position of interested parties looking to buy a business. Due diligence is essential during the business sale process to protect the interests of shareholders and avoid interactions with unscrupulous buyers.

When selling your business, appointing an experienced business broker or business transfer agent can give your business the best chances of selling. At Selling My Business, we offer a free company valuation to answer how much is a business worth? As national business sales experts, we have a strong track record of successful sales across a range of sectors and are uniquely placed to support both accountants and clients.

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