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In one of the surveys done on all the deal makers, to know the necessary reasons for the slowing down of the entire process of the deals it was interestingly found that there were something common in all their feedback.

The Flimsy Benefits Of Maintaining The Clean Financial Books Of Accounts

The general factors that appeared in the most of their replies were

  • The poor reporting system of the financial
  • Excessive dependence of the owners
  • Inability to expand the customer concentration
  • Deficit of the Recurring Revenue Streams

According to the Generational Equity Reviews, the prime reason why most of the business owners tend to ignore the quality of the financial is the perceived cost. To install a software package in order to maintain the books of finance correctly and hire an expert account manager is too costly in respect to a part-time employer who maintains the books of account following some of the traditional versions of the accounting program which are no more in use. Not only the tiny companies, but a lot of high range deal makers who seal the costliest deals every month, face with this problem. Most of the buyers, who show their interest in buying the companies, check out the entire financial system of the company thoroughly before delving in to any kind of transaction.

It is essential to keep in mind that most of the professional buyers in order to review the opportunity in an investment prefer to check the audited financial systems. They know that maintaining the audited accounts is a matter of some expense and it is not possible for every concern to do so. So they find no issues with the non-audited books of accounts provided that they are accurate and don’t use any kind of privately designed system software. If you plan to sell off your company to a third party or even to some of you family member, keeping a clean financial record is very necessary, it somehow befits the owner to keep the financial house in order.

Again there are business owners who tend to avoid this elongated and expensive method, since there’s some serious commitment involved in doing it. But being afraid of this commitment, they tend to overlook the return of the investment made in keeping the clean financial records in respect to the alternative methods. And moreover, the risk of getting involved with the IRS issues also minimizes if the accounting is done adequately at the end of the year during the tax returns.

In the Generational Equity Reviews, you can find that having the clean financial records are indeed necessary and beneficial especially while processing the exit plan. It might sound repetitive, but they have always laid stress upon the fact that avoiding this process might be considered a serious mistake in the long run. Of all the four reason that are mentioned in the beginning for failing to seal the best deals, this irregular and inadequate maintenance of the accounting has turned out to be the most prominent and common of all. But to all’s surprise, it the easiest to fix as well.

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