How to Prepare Your Business for PurchasePosted on April 4th, 2019
When preparing to put your business on the market, there’s a lot to consider. How much is it worth? What are buyers looking for? What should you include in the sale? And what do you need to do to prepare your business for sale? Here’s an overview of the steps you’ll need to take before putting your business on the market.
Before You Sell Your Business
Before you start advertising, a few housekeeping tasks will improve your chances of a sale. Buyers are looking for businesses that are low risk and with a good chance of growing in the future. Taking the time to prepare your business now will improve the chances of a high financial return.
Determine how much your business is worth. The valuation you get for your business can make or break a proposition. Hiring a professional to do a complete valuation will help provide a realistic estimate of what your business is worth. Our team conducts business valuations to review a business and its competitors. We consider inventories, assets, sales, receivables, and outstanding debts and liens to help you determine the market value for your company.
Organize tax returns and financial statements. Potential buyers are looking for complete transparency, so you can expect a thorough inspection of all your financial records and tax returns dating back at least three years. Books that are messy or incomplete are a huge red flag for prospective buyers. Now is the time to work with your accountant to ensure your books are in order and everything is accounted for.
Jump-start Sales – Do not wait for your business to flounder to put it on the market. If you know that selling is in the cards, take time to strategize for short-term success. This may mean diversifying your customer base, offering promotions, and pushing out inventory. Investing in marketing, operating systems, and new fixtures may seem like a waste, but it has the potential to boost sales, as well as your bottom line.
Timing – These steps take time, so it’s important to plan for the sale of your business well in advance. Ideally, you should start planning one to two years before you want to sell.
Pillar & Company provides business valuation and succession planning services to small business owners in Naperville and the surrounding areas. If you are thinking of selling your business in the future, it’s never too early to start planning. Give us a call today to learn how we can work together to make the sale of your business a profitable success.
How Online Accounting Software is Better than Manual Record KeepingPosted on December 11th, 2018
If you own or run a small business, you may be wondering which accounting methods are best for your growing company. Whether you keep your own books or hire a bookkeeper, you’ve likely heard of online accounting software. QuickBooks is the most popular among small businesses, but is it any better than using a simple spreadsheet to keep your books?
QuickBooks offers many advantages over manual bookkeeping. It simplifies your accounting tasks and is specifically designed for use by people without accounting expertise. Here are some of the key differences between online accounting software and manual bookkeeping and why QuickBooks is a better solution for your business.
What is QuickBooks?
QuickBooks is a suite of accounting software applications designed to simplify bookkeeping tasks for individuals and small businesses. It was designed for use by business owners and managers, not necessarily for accounting professionals. QuickBooks was developed by Inuit in 1998, and since then has become one of the leading accounting programs in the country. Today there are several versions of QuickBooks on the market, designed to meet the needs of different industries.
Why QuickBooks is a Better Than Manual Accounting
One of the biggest issues with manual accounting is that one simple mistake with a calculation could jeopardize your whole accounting system. Using manual accounting methods, you will also have to design your own processes, including categories and formulas. Formula errors are hard to catch, and often lead to miscalculations throughout your books. With QuickBooks, the formulas are already built into the system, ensuring accurate bookkeeping and reporting.
Because QuickBooks has developed industry-specific accounting products, you can take advantage of high-level reports that are specifically tailored to your business. Unlike spreadsheets, QuickBooks keeps track of every change made to your books, so if you do make a mistake, you will always be able to find it. Because all changes are updated in real-time, you will never have to try and guess which version of your spreadsheet is the most up-to-date.
As your business grows, and your finances become more complex, you may decide to outsource your bookkeeping tasks. If you are using manual methods, the transition will be much harder. Most accountants are well-versed in QuickBooks and will be able to take over your accounting tasks seamlessly.
At Pillar & Company, we offer QuickBooks services, including set-up, maintenance, training, and troubleshooting. We would love to work with your business to create an accounting system that is easy to use. Give us a call today to schedule a QuickBooks consultation in our Naperville office.
What Happens if the IRS Requests an Audit on My Finances?Posted on July 27th, 2018
An IRS audit is no laughing matter, but before you start to panic, here are some facts to remember. There are many reasons you may have received an audit notice from the IRS, and one of the most common is that there’s a minor discrepancy on your tax return. We realize how stressful an IRS audit can be and Pillar & Company has the tools and resources to help you through the process.
What Is an IRS Audit?
According to the IRS, an audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.
While audits are straightforward, they are conducted for to make money from taxpayers who have either filed incorrectly withheld information or misrepresented their finances in some way.
What the IRS Expects of You
Correspondence Tax Audits: More than 75% of IRS tax audits are conducted by mail. If you receive a correspondence tax audit, you will be asked to answer some questions or back up information on your return with additional documentation. Usually, once you or your CPA have sent in the requested information, the matter will end, and you won’t have to speak to an IRS representative.
In-Office Tax Audits: If the IRS requires more detailed information about your tax return, they may require you to visit your local IRS office for an in-person interview. The IRS representative will likely request that you bring certain documents, and you should always bring your tax professional with you for representation.
Field Audits: The IRS conducts a field audit when they have numerous questions about an audit and need to conduct an in-depth investigation. During a field audit, the IRS agent will come to your home or business for an interview and document review. It is important to have a professional accountant or attorney present for your field audit.
Protecting Yourself During an IRS Audit
First, it’s important to realize that the IRS auditor is just doing his or her job. Just like you, they want the audit process to go as smoothly as possible. To save yourself time, and possibly money, we recommend hiring a CPA or tax professional to represent you during an audit. Your accountant works for you, not the IRS, and will use their knowledge and expertise to protect your best interests.
At Pillar & Company, we have the skills and the expertise to handle your IRS audit, no matter how complex. To learn more about how we can help you navigate the process, give our Naperville office a call today.