Article

What Manufacturers Need to Look for in an Accounting Firm

With the large number of manufacturing and distribution-based businesses located throughout New England, two clear trends have emerged—many older business owners are beginning to prepare for their retirement or transition out of their day-to-day roles, while those who are maybe a bit younger are looking into growth opportunities.

< Back to Insights
Insights  <  What Manufacturers Need to Look for in an Accounting Firm

With the large number of manufacturing and distribution-based businesses located throughout New England, two clear trends have emerged—many older business owners are beginning to prepare for their retirement or transition out of their day-to-day roles, while those who are maybe a bit younger are looking into growth opportunities.

With the large number of manufacturing and distribution-based businesses located throughout New England, two clear trends have emerged—many older business owners are beginning to prepare for their retirement or transition out of their day-to-day role, while those who are maybe a bit younger are looking into growth opportunities. Regardless of which path these owners choose to take, they each require careful planning to ensure they are done correctly. 

In both cases, it makes sense for the manufacturer to partner with an accounting firm that offers not only experience, but also responsiveness and a reservoir of other services that could be needed to deal with every potential roadblock—expected or unexpected—that may surface along the way.  

The experience level of the accounting firm stands as the single most important consideration when it comes to manufacturers that are on the verge of some sort of major event in their business lifecyclesuch as a retirement, a reinvestment or an expansion. The manufacturer will certainly want to work with a firm that has extensive experience in manufacturing and understands the intricacies of their specific subindustry or niche. 

The experience level of an accounting firm becomes more paramount especially if the company is considering a transaction now or in the future. In these situations, the business will want to partner with an accounting firm that is familiar with the industry, and understands nuances commonly dealt with in diligence, such as diversification of the customer base to avoid concentrations; transferability of key contracts and relationships with vendors or customers; and net working capital needs to operate the business. The accounting firm you choose will need to have experience in these areas and more in order to be the right choice to guide you through a successful transaction. 

Additionally, the firm should have experience with various billing systems, or the method in which the manufacturer has determined contractual rates and allowances with key insurance providers and outside vendors. If the business owner is considering a strategy of growth through acquisition, it’s important to identify an accounting firm that has experience with the size of transaction you envision being involved withWhether that be smaller add-on acquisitions to slowly expand your geographic reach or service offeringsor a major acquisition of a competitorIt’s important that the skillset of the accounting firm you partner with lines up appropriately with the long-term vision of the business. Mergers and acquisitions can be a very delicate matter, so the company is also going to want to have a firm working with them that understands the sensitivity of such transactions and can deliver under tight timelines. 

Another important consideration, if a potential transaction is on the horizon, is finding an accounting firm that has relationships with other key advisors. Having a strong network of attorneys, brokers and other professionals could be greatly beneficial to a manufacturer thinking of growing their business through expansion, or one considering a sale to maximize their return upon stepping away from the business. Particularly if this would be the first M&A transaction that you’ve been through as a business owner, being able to rely upon your accounting firm to make key introductions to fill out your deal team is invaluable.  

Overall, hiring the right accounting firm—in addition to all of those tangible items mentioned earlier—should be about finding the firm that is the right fit for your company. Manufacturers want a firm that prioritizes their business, that shows 24/7 responsiveness and accessibility, and that shares the same culture as their business. These intangibles are vital; few things are more critical in working with an accounting firm than a feeling of trust and comfort between the firm and the client. 

Continue the Conversation with Our Team
Get in touch with us.

Contact Us