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12 Business Preparation Tips from An Accounting Operations & Transformation Expert

Your business is growing, or you’re planning for its growth — but are you ready? Here are 13 business preparation tips that speak to different stages of the business lifecycle. Whether you’re considering a transaction, preparing for an audit, improving operations, or looking ahead at future trends.

I’m Tori, a Partner at Centri and the leader of our Accounting Operations and Transformation Practice. As a Certified Public Accountant in the state of PA and with over 12 years of consulting experience, I’ve worked with a lot of different clients and across a variety of industries. 

Here are real questions I’ve heard from others in your situation, along with advice I’d give you if we were sitting down in person, talking. All of them are based on my encounters helping businesses find the right solutions that drive their growth forward.

Looking Ahead: Future of Accounting

1) Are companies prioritizing a different skill set in leadership roles now versus 5 years ago?

I definitely see a trend of companies looking to attract leaders with strong AI and tech expertise. There’s a mindset of doing more with less, but also freeing up the accounting function for more meaningful work.

For example, using resources to shift away from intensive and manual month-end close processes to instead work on value-added analysis that benefits management and stakeholders. At Centri, we’ve worked with clients to automate a variety of labor-intensive activities such as:

• cash and intercompany reconciliations
• journal entries
• internal reporting

2) What has changed in audit prep since the pandemic and has remote work made them more efficient?

During the pandemic the accounting profession transitioned to remote and it proved effective for the most part. But those processes relied on creative workarounds and exceptions. For example, auditors were relying on live video walkthroughs or photographs to audit inventory, which carries a higher level of risk. 

Personally, I like a hybrid model. Spending time on site at the start of each engagement and periodically throughout adds value. We can meet management in person and build those key relationships that help us understand how the business, systems, and team operate.

But from there, I think remote work has become more feasible. Cloud-based systems make it easy to accomplish this.

However, I’d say it still depends on the company culture. Some clients operate with an ‘out of sight, out of mind’ mentality, and there’s a risk that collaboration breaks down when it’s needed most. 

Ultimately, the experts you work with should cater to the blend of remote and in-person work that best supports you in your operational transformation goals as you prepare for an audit.

If You’re Getting Ready For Transactions

3) How can you start preparing to sell your business in 2-3 years?

The importance of accurate financial statements can’t be overstated.

If you want to sell, you need a good foundation that ensures your financial statements are accurate and attractive. Doing this means you can identify one-time adjustments and create a compelling narrative, which will be key to drawing in a buyer.

Key areas to look at include: historical trends, profitability, plus customer and revenue insights.

I recommend you transition your financials to GAAP before going to market. Also, focus on creating an efficient and repeatable process so that when it’s time to sell, generating financial reports is smooth and can be done in a timely way (which will also be attractive to buyers).

4) What are the common acquisition mistakes you see?

Some of the biggest pitfalls or acquisition mistakes I’ve seen are:

• A lack of clarity around the true drivers behind financial forecasts.
• Customer or key contracts are highly concentrated. (EG., 40% of the business revenue is tied to a single customer or contract, which may be at risk post-transaction if the relationship was held by the exiting owner or leadership.)
• Integration readiness and cultural alignment are missing, impacting the cooperation between the companies involved in the M&A transaction.

I’d recommend getting a thorough buy-side Quality of Earnings (QoE) prior to acquisition. Doing so will measure the reported earnings and bring those potential red flags or issues to light.

5) Can you recommend how to clean up messy bookkeeping for a company you’re acquiring?

First, you need to figure out if you need accurate historical financials or if you just need clean financials post-transaction. 

For example, a client of mine acquired a company to expand its store count, not necessarily because of the historical financial performance. As such, they chose to focus on clean financials after the transaction.

For pre-transaction work:

• Obtain beginning trial balances.
• Collect supporting documents for the balance sheet account. (Bank statements, payroll registers, AR and AP subledgers, etc.)
• Rebuild what the beginning trial balance should be based on that data.
• Determine what cash to accrual adjustments are needed. (Prepaids, payroll, accruals, vendor accruals, etc.)
• Roll forward workpapers through the current month.

But if you’re evaluating the company and need reliable data to inform decisions, cleaning up at least one year’s prior records will be more beneficial.

For post-transaction work:

• Focus on cleaning up the books at the opening balance sheet date.
• Use a similar process from above to rebuild the balance sheet and tie accounts to the source data that’s available.

I’d also recommend that regardless of which approach you choose, you go through an opening balance sheet walk across. 

1. Start with the acquired company’s closing balance sheet. 
2. Make adjustments based on the supporting documentation of each account.
3. Incorporate purchasing price accounting adjustments. (Goodwill and intangible assets.)
4. Load the final trial balance into your ERP and start planning integration. 

Integrating accounts payable is typically the easiest to transition and gives you oversight of cash disbursements post transaction. Doing accounts receivable last will help you minimize disruptions to your acquired company’s billing and collections process.

6) I’m eyeing PE in the future, so what can I do to prepare for the due diligence process?

Don’t wait until you’re on the market to get organized. Work on presenting clean financials now. And prioritize key areas like revenue recognition to ensure accuracy in what you’re recording. 

Also work on compiling balance sheet reconciliations and supporting workpapers that validate your financials. Along the way, consistently track KPIs and shape the narrative of your numbers so that when due diligence begins, you have a well-documented and compelling story.

If You’re Preparing For An Audit

7) Can audit readiness projects uncover real business problems and not just compliance issues?

While they are designed to make sure your financials comply with proper accounting standards, they can help you uncover broader operational issues. This includes:

• Inefficient or incorrect processes that lead to delays
• Inaccuracies
• Unnecessary costs
• Gaps in internal controls 

For example, in a recent audit readiness project we were reconciling revenue to source materials and contracts when we discovered certain customers were never billed for services provided. Our client was able to invoice these customers and recover previously missed revenue (and cash) and then implement processes to prevent that from happening in the future.

8) Is it worth paying for pre-audit help?

Accounting operations and transformation support can go a long way in making for a smooth audit and a more efficient process without unpleasant surprises. 

For example, I had a client who didn’t engage in audit prep for their first-year audit and ended up paying tens of thousands in out-of-scope fees to their external auditors. The following year, they brought us in for support, and not only was the audit process smoother, they were also able to reduce their baseline audit fees. 

It’s helpful in other scenarios too, like if you’re mid-audit and find out a new standard wasn’t implemented, like ASC 842, resolving it can take weeks based on how many leases you have. This then leads to missing reporting requirement deadlines and adds extra costs. All of which could’ve been caught with preparation.

9) For private companies, is there value in the rotation of auditors every set number of years?

While it’s not required of private companies, it can be valuable to do this similar to public companies. Switching auditors can help you periodically assess if your needs are being met effectively. 

You need to feel confident that your auditors are asking the right questions, even if they’re familiar with your company. Revisiting the rotation of auditors every few years can help you get the right level of challenge and perspective. It also helps keep a degree of independence and objectivity.

If You’re Looking To Improve Operations

10) What should I do if my company doesn’t have a full-time CFO?

Consider working with a trusted partner who can provide interim contracted CFO advisory services. That way you have an expert who can support you with your strategic planning, forecasting, and budgeting while also managing and overseeing the accounting and finance function.

Working with a partner who can provide outsourced CFO services for an interim period ensures you have the right expertise you need to operate effectively and fill in the gaps.

Here are two examples that show how it can be beneficial.

Client A engaged us for interim CFO services. Right now, Centri works approximately 20–30 hours a week, overseeing their entire accounting and finance function. Some of the activities we help their team with are: 

• month-end close
• board packages
• audit support
• ERP implementation support
• budget and re-forecasting

Client B doesn’t have a CFO and engaged us to assess their processes to identify areas that needed streamlined to shorten their month-end close. We now run their entire month-end close process during the first week of the month, preparing and reviewing journal entries, balance sheet reconciliation, fluctuation analysis, and a board package by the 15th of each month.

11) Do you recommend recasting numbers for an acquisition or should I change what I’m doing a few years ahead of a sale?

I do see value in making adjustments prior to a sale as long as those changes are supportable and in accordance with the applicable accounting guidance. I’ve worked with clients whose revenue recognition changed substantially due to ASC 606. 

Most clients then work with us and their legal team to refine their customer contracts to achieve more favorable results. Sometimes you just need to tweak a few sections of an agreement for a completely different outcome.

12) What do you recommend to a company starting to centralize accounting after doing it piecemeal?

Start with proper planning and data management! Centralizing your accounting will be a major shift, but it will also unlock real value. The key to accomplishing that is having a thoughtful plan and tracking against it.

Start with your accounts payable process. Review historical data and align it to best practices and industry standards. If you operate across multiple ERPs or systems, consolidating data should be a top priority. Duplicate vendors are also a common issue we see with decentralized operations. Fixing that early on will prevent operational issues later. Once the data is clean, you can focus on streamlining vendor management, payment workflows, and expense coding.

As you do this work, make sure you’re documenting and training so you have clear policies and procedures in place before you go live. This will ensure your team members are working efficiently and effectively.

Tori Jancovic

Partner | Accounting Operations and Transformation Practice Leader | CPA

Tori is a Partner at Centri Business Consulting and the leader of the firm’s Accounting Operations and Transformation Practice. With over 13 years of experience, Tori helps optimize and modernize clients' accounting functions to support scalable growth, operational efficiency, and audit readiness.. View Tori Jancovic's Full Bio