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What to Look for in an Accounting Partnership

Partnering with an accounting firm that offers a depth of experience, responsiveness, and a broad range of services will go far toward making any potential transactions smooth and successful.

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Partnering with an accounting firm that offers a depth of experience, responsiveness, and a broad range of services will go far toward making any potential transactions smooth and successful.

Many businesses are reaching a major crossroads as their founders get ready to retire or exit their organization, while others are looking to capitalize and make acquisitions to grow their companies. But before these thought processes go too far toward becoming reality, it makes sense for a business to partner with an accounting firm that offers experience, responsiveness and a deep bench of additional services, which can best prepare them for all the expected – and unexpected – requirements and challenges along the way of a transition.

As a general rule, the experience level of an accounting firm is going to be key

As a general rule, the experience level of an accounting firm is going to be key, especially if the company is considering a transaction now or in the future. In these situations, the organization will want to partner with an accounting firm that is familiar with their industry, and understands nuances commonly dealt with in diligence. Experience with various billing systems or how the business has determined contractual rates and allowances with key insurance providers are just two examples. If the business is specifically thinking about a merger or acquisition, one of the areas to look at more closely is the size of transactions that the accounting firm typically deals with. There can be a big difference from a diligence standpoint in terms of the approach taken for the roll-up of a smaller business versus the acquisition of a larger company. You’ll want to partner with a firm that has experience with similarly-sized transactions. In these dealings, priorities will be similar, as will the sophistication levels of the sellers – most are going to rely on professionals to help them navigate the process.

Along with this experience, accounting firms that have existing relationships with other advisors can serve as a great resource to any organization. If the business is thinking about acquiring another company, they’ll need an M&A attorney, or potentially a broker to help them identify a target, or other professionals. Accountants that can help their clients by leveraging existing relationships to provide assistance that goes beyond accounting should definitely be preferred.

Although it seems like it should go without saying, another quality organizations should look for in their accounting firms is responsiveness. It’s unfortunate, but also not uncommon, that deals can stall out and eventually fall apart because one side is not being responsive. You certainly don’t want your accounting team to be the reason why the deal falls through. Look for accounting firms that recognize that transactions are time-sensitive, are able to calmly deal with fire drills, and will demonstrate sensitivity and responsiveness to your key deadlines.

Along these lines, the intangibles go a long way in these types of transactions, so it’s best to make sure the accounting firm feels like a good fit with your organization. Any potential transaction that you explore is going to be stressful. At times, your interactions with the seller are going to be challenging. As you get further along in the transaction, situations will only get more stressful and there may be some difficult conversations required; if you’re working with an advisor on your team that isn’t a good fit personality-wise or, worse yet, doesn’t inspire confidence or trust, those later conversations will only be that much more difficult.

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Finally, as you look at the range of accounting firms that are able to provide the services you think you need, keep an open mind to additional services you may need down the line. Especially for business owners who are considering their first acquisition, you will be learning as you go. Unanticipated issues as a result of the due diligence process are common – you may come across an issue with technology that requires IT diligence, or a tax issue that needs specific expertise depending on how you intend to structure the deal, or integration issues post-close. Selecting an accounting firm that offers a broad depth of services, and therefore can act as a one-stop shop, can help make the whole transaction process much more painless. It also gives your business an advantage to hit the ground running post-close of the deal.

Partnering with an accounting firm that offers a depth of experience, responsiveness, and a broad range of services will go far toward making any potential transactions smooth and successful.

 

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