By Alex Dodgshon

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Is it time to spring clean your business records?

If you are serious about exiting your business, the start of a new tax year is a great time to de-clutter your documents, finalise your financial records, and confirm your compliance with government legislation.

Making sure your records are up to date and ready for analysis shows potential buyers that your business is on top of its financial, legal and administrative requirements. It puts you and your business in a positive light when a buyer shows interest. Being able to respond quickly with current, accurate, and valid documentation can make a good first impression.

In this blog we review the different types of business records that add value to a prospective buyer, and share some tips on how to get yours ship shape and up to date.

Let’s start with financial records

You have one year to file your business accounts. Why wait until the last minute to do it? Businesses that take the full year to file usually do so because they don’t maintain control of their books. This includes invoices, receipts and bills, which can pile up quickly if you ignore them. Leaving your business accounts to the last possible minute only causes stress and anxiety, and you’re more likely to rush and make a mistake.

If you don’t have oversight of how your business is performing at any point in time, how can a buyer trust that your business is worth what you say it is? You’ll come across as disorganised and careless. Don’t run the risk of a genuine buyer walking away.

Maintain a good relationship with your accountant

As soon as your end-of-year figures are ready, send them to your accountant. Hanging on to them won’t achieve anything. If you are bad at remembering to send the information, ask your accountant to set you a deadline and put a reminder in your diary. We promise you’ll feel better once they’re off your desk and on to someone else’s!

Dust down your certificates

Business accreditation and certification can be an effective way to build customer confidence in your products and services – but only if they are valid. Lapsed memberships or certifications could be misleading to both customers and interested buyers. Set some time aside to review the certificates you display on the wall and on your website. Renewals are usually simple to do online as long as someone is responsible for actioning them. Allocate responsibility to someone in your team so nothing is missed.

That person should also be questioning whether each certification is still relevant and beneficial to your business and its future owner. Spending funds on unnecessary memberships is not a sign of a well-managed and well-organised company.

Renew insurance policies

From public liability to equipment breakdown, business insurance comes in many different forms. If a buyer asked, could you tell them what types and level of insurance cover you have in place, which insurers they are with, and when your policies are due to expire?

Clearly, letting business insurance expire would cause unnecessary risk to the business. Staying on top of renewals involves more than just clicking auto-renew. As a business owner you are responsible for reviewing insurance policies annually to ensure they continue to meet your business requirements and provide the right level of cover. For example, investing in an expensive new piece of machinery might require you to increase the amount of tool and equipment cover on your protection policy. Same goes if you own your business premises. If the value of the freehold has increased, you may well be underinsured, which will cause problems if you need to claim.

Reassure prospective buyers by staying on top of your insurance renewals. Remember to keep a record of expired policies too, just in case the future business owner needs to make a retrospective claim. Other documents to keep safe.

Ensure company policies meet current legislation

The UK Government has made several changes to employment legislation this year, with most coming into effect in at the start of the new financial year. Recent changes include new allowance for carer’s leave, changes to paternity leave entitlement, and the right to request flexible working from day one of employment. Here are all the details of the laws that changed in April 2024.

As with insurance policies, reviewing your people policies annually will ensure your business remains compliant with employment law and your team can access all the opportunities they are entitled to. Retaining key team members during a sale can be a crucial part of a successful business exit.

Other legal documents

There are a raft of other legal documents, policies and licences to review and renew to ensure your business is operating within UK law and build a picture of a healthy, well-managed business. Here are a few to note and dig out for review:

  • Risk assessments
  • Health and safety documentation
  • Data protection policy
  • ICO certification
  • Money laundering training
  • Trademark and copyright licences
  • Software licences

What can you do now to become more responsive?

Taking time to review business policies, legal documentation, renew certifications and get your financial records up to date will put your business in a favourable position to respond to buyer enquiries. Think about what you can do now to become more responsive to business record requests and able to provide the most recent, relevant data to potential business buyers. If you would like advice on how to approach this task and other ways to prepare your business for sale, please get in touch.

There’s a common saying that a new broom sweeps clean. At Uscita, we have a slightly different perspective on spring cleaning. If you don’t start the clean up now, the new broom might never arrive. What are you waiting for? Do it now!

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