When someone is interested in purchasing another business, it is common practice to hire an accounting firm to investigate the affairs of that prospective purchase. We recently welcomed one such firm to complete some due diligence on one of our clients.
In any acquisition, it is important to make sure that the financials actually are what the seller claims them to be. In addition to the audit, the buyer also needs to ensure that the purchase price is based on an accurate valuation.
These processes are important, however some firms often confuse quality with quantity. During this particular firm’s recent visit, there were more people present than necessary to complete the assessment. We equate this approach with “trying to hit a fly with a sledgehammer.”
The client pays for the time spent by the due diligence team; it becomes overly expensive and not cost beneficial when time and resources are spent on items that do not make a difference. At our firm, we first think things through and determine what factors are important. We focus on what matters to our clients — including getting a job done cost efficiently. We use a process called the Quadrant Planning System to consistently analyze, strategize, and deliver. Some would say that we try to hit flies with fly-swatters!
Read more about our Mergers and Acquisitions services here.