At Tim Nash & Associates, we include due diligence consulting as part of the services we offer.
Due diligence is the process of going through a company’s financial statements and verifying the accuracy of the information. When buying a business, due diligence is very significant for knowing the numbers presented are truthful. Also, due diligence needs to be performed to maintain internal controls for your own company. This is a way of making sure that all of the numbers that appear on financial statements are actually correct.
Many times, loose measurements or inflated numbers can create errors that cause problems later down the road. A good example would be errors on income tax statements. The Australian Tax Office penalizes companies for certain errors. By performing due diligence you can have full faith and confidence that the numbers that appear in your statements are accurate.
A due diligence report is also important when purchasing a company. You may be examining financial statements in order to determine the worth of the company you are buying. However, those numbers may not always be accurate. In addition, sellers of businesses have been known to inflate certain numbers in order to give the company a better profile.
In this situation, you need due diligence in order to assess the accuracy of those numbers. That way, you can have confidence that the company you are buying is the one that you see on paper.
In order to properly conduct due diligence, it is often necessary to include your accountant in the process. Your accountant is trained in buying-a-business due diligence. This allows them to see things that you otherwise would not be able to. They may also be able to prepare a business due diligence checklist for you.
Consider using the services of Tim Nash & Associates in order to prepare your next due diligence report. We can help you analyse the numbers for your company. In addition, we can help you evaluate any company you may be considering purchasing. Give us a call today to find out more.