Accounting / Outsourced Accounting and Due Diligence

Outsourced Accounting and Due Diligence

Due diligence is a deep-dive investigation relating to compliance. It can be an essential function to help you understand your potential liabilities. Ongoing monitoring is essential to keep up with ever-changing risk factors, putting mitigating activities in place to attempt to lower risk exposure. The vital information garnered sheds light on your business procedures. When it comes to performing due diligence, an outsourced accounting firm can play an important part in ensuring compliance and financial scrutiny.

How Outsourced Accounting Can Help With Due Diligence

Your outsourced accounting firm can establish the following:

  • Make sure any capital outlays added to your balance sheet are depreciated properly
  • Watching your liquidity to make sure you have enough cash for the things you pay for and want to expand into
  • Oversee whether any new customer contracts have payment terms that could drain your account.
  • Financial modeling scenarios. These help consider various scenarios and situations and how they will impact your results and cash flow.

Additionally, an outsourced accounting firm will preform monthly reconciliations for bank accounts to verify:

  • All revenue and expenditure activity in your records on a monthly basis.
  • That the amounts shown on accounts payable are true payables, ensuring timely paying of your vendors and helping you take advantage of discounts given for early payments.

Your outsourced accountants check your financial statements to come up with forecasts and projections for your firm. When outsourcing accounting to a third party, your balance sheet is critical in helping it evaluate your financial status, identify red flags and optimize your processes.

Leveraging Outsourced Accounting for Due Diligence Matters

The importance of comprehensive due diligence cannot be overstated. It forms the cornerstone of strategic financial management and risk mitigation. However, the intricacies of executing due diligence effectively can be overwhelming, particularly for businesses striving for growth and operational excellence. Entrusting this critical function to an outsourced accounting firm can be beneficial, as businesses can ensure their due diligence processes are not only exhaustive but also perfectly aligned with their strategic goals.

Due diligence matters include:

  • Ensuring the accuracy and security of your financial data and providing you with analytics to help you understand budgeting to make better decisions.
  • Auditing financial records, evaluating assets and liabilities, and assessing operations and business practices.
  • Helping you practice prudence by assessing associated costs and risks prior to completing transactions.
  • Helping you craft a plan to move forward to optimize your operations and position your organization for the future.
  • Reviewing and preparing performance indicators.
  • Overseeing overhead expenses and implementing cost-reduction methods.
  • Assisting with added financial reporting as you grow.
  • Giving you access to resources 24/7 to get required financial data whenever you need it.
  • Planning, budgeting and forecasting cash flow reports — projections for next year, next quarter, even next week to foresee slow periods so you can plan in advance what you can do about them.
  • Analyzing your internal processes to ensure productivity, improve security and protect assets from fraud attempts.
  • Minimizing vulnerabilities to various accounting and financial computation errors that may affect your business operations.

Due diligence accounts for flaws in your processes as well as opportunities for improvement. Building best practices identifies problems, reconciles accounts and measures impact in key accounting areas critical to accuracy, providing an understanding of overall financial performance and stability and detecting any underlying issues.

If you think you need support on this matter, please contact your BlueStone representative or contact us today.

Author: Trey Gailey, CPA

Trey Gailey is a founding member of Bluestone Services and serves as the firm’s Managing Director and Director of Accounting. He has deep experience providing accounting services across a wide swath of industries, including medical practices, distribution, and legal services. Trey has clients in the US and other areas of the world, garnering significant experience with international tax compliance to supplement his familiarity with domestic U.S. tax law.

When you work with Trey and the team at BlueStone, you can maintain confidence in your accounting. Our team provides complete, accurate and timely financial data and reports. Thanks to the efforts of a professional team and the technology we use daily, BlueStone’s can provide virtual or onsite outsourced accounting services based on your needs.

In his Managing Director role for the organization, Trey helps oversee the client experience for all service areas in BlueStone Services and focuses on the core operation offerings. Prior to helping develop and lead BlueStone, Trey officially joined its parent company, KatzAbosch in 2013. There he serves as a key shareholder.

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