What kind of accounting information do I need to ask from a business owner when Im goin to buy it from them?

In other words, I need to prepare an outline regarding information that I should request from the business owner and what kind of questions or concerns I should ask about financial statements and etc.What kind of accounting information do I need to ask from a business owner when Im goin to buy it from them?Its all about money. Get financial statements like annual reports, balance sheets, bank statements, Profit and Loss statements, journal entries, ledgers on customers, if any. Everything that shows income and expenses. Inventory is important too. How many products are on hand? Cash flow is also important. How much comes in and what are the fixed expenses you must pay, monthly and yearly. Tax liability, employee payroll records. Just ask for every financial report available.



Also comparative reports like year over year figures. Were sales higher or lower than last year? Expenses too. Are they going up as things get more expensive?



Getting all the company's information is called doing due diligence so you can make a decision to either buy the company or pass it up; or even offer less money for it.What kind of accounting information do I need to ask from a business owner when Im goin to buy it from them?Do a search for the term 'due diligence checklist', and you'll find several samples of the types of things to look for.



It will be an iterative process. Start with the basics, and let them know that you'll be asking for more data later. That way, they won't be as annoyed with all of the data requests.What kind of accounting information do I need to ask from a business owner when Im goin to buy it from them?My dear friend. Be cautious.



On top of first and the second answers I can say engage an accountant skilled in this area who will truly represent your interest. You discuss with him what exactly you want to do with the business, your interests etc. He makes a list of documents, reports required and hands them over to the current bussiness owner. He will analyse the reports of maybe 5 years (example) and advise you wisely. Because he is skilled in the area, trust me. Business is not like DIY picture-hanging on the wall. You need to invest, bring in appropriate experts when required inorder to maximise profits.



If you request all those profit %26amp; loss statements they will still need an expert to translate for you if finance and accounting is not your area (no offence here).



Bottom line, let experts worry with the peripherals, you yourself are tasked with the core task of leading your business into sucess for the next 50 years.



Good luck my friend and succeed!