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.
How Outsource 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 they 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.
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.