Finance: The Area Everyone Expects, and Still Gets Wrong

Of the nine areas a buyer digs into, finance is the one every owner expects. It's also, surprisingly often, the one that trips people up, not because the numbers are bad, but because they're not organised in a way that answers the questions being asked.

A buyer isn't just checking that your business is profitable. They're checking that the profit is real, repeatable, and well understood. For an MSP, that starts with the mix of revenue: how much is recurring managed services income against one off project or hardware resale work, since recurring revenue is what buyers value most highly. It also means multiple years of management accounts reconciled against your statutory accounts, a clear breakdown of revenue by client, by contract type, by recurring versus one off, working capital trends, and a proper explanation, not a shrug, for any unusual month, quarter or year.

The volume of this can feel enormous if you're pulling it together for the first time under pressure. In our own process, the biggest time sinks weren't complicated calculations. They were simply finding old numbers, in old formats, and making them consistent with how the business reports today.

The fix is almost boringly simple: keep this information in due diligence ready form long before you need it. Monthly management accounts that reconcile cleanly. A running note of anything unusual, with the explanation written down at the time, while it's still fresh in your head rather than three years later. A revenue breakdown updated as routine, not reconstructed from memory.

Do that, and finance, the area everyone assumes is "already sorted," genuinely becomes one of the easiest parts of the process, rather than the thing eating three weeks of your accountant's time mid deal.

If this has you wondering how ready your own business is, the free readiness assessment will show you where to look first, in about three minutes.