Industry Insights

Important Post-Closing Considerations of an Owner-Managed Business

March 2015
Author:  Brandon Shirley

Brandon Shirley

Partner

Audit

Manufacturing & Distribution

360 E. 8th Avenue, Suite 201
P.O. Box 1196
Bowling Green, KY 42102-1196 (42101)

Bowling Green
270.781.0111

What do the most successful college basketball teams usually have in common? They excel at fundamentals. The same can be said for successful businesses.

In owner-managed businesses that completed the intense due diligence and closing process that comes with a sale or merger, the accounting team is often stressed and facing myriad questions:

  • Has a proper cutoff been achieved in the accounting system?
  • Is the accounting team familiar with the definition of all working capital items in the purchase agreement, and are they ready to prepare accurate working capital settlement calculations?
  • Will the company adopt the new Private Company Council accounting alternatives for financial reporting?
  • Have all the purchase accounting requirements been met?
  • Does the team understand the entirely new level of reporting expectations from the private equity sponsor?
  • Are the key provisions of the new loan agreement and reporting requirements clearly understood?

Creating a game plan to respond to these challenges is an important part of the transaction. This could prevent significant struggles in the financial reporting process that can linger for months after the closing date. It’s just like legendary coach John Wooden said:  “It’s the little details that are vital. Little things make big things happen.”

For more information on creating a plan that addresses the important details after the transaction is closed, contact your BKD advisor.

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