Financial Readiness for Selling a Business: Janice O’Reilly on M&A Success
Financial readiness is often viewed through a tax lens, but that lens shifts when preparing for the sale of a business. Buyers evaluate how financial information reflects ongoing operations, sustainability, and risk, not simply whether reporting meets tax requirements.
In the latest episode of Touchstone Talks, a weekly business advisory podcast, Episode 15: Financial Readiness—What it Really Means for M&A Success, Janice O’Reilly, Partner, Of Counsel at AAFCPAs, reflects on what financial readiness requires when a business moves toward a sale. “Most of the companies we deal with… usually do their financial statements just for tax purposes,” Janice said, describing a gap that may only become visible when a potential buyer begins its review.
The discussion moves through areas that tend to draw attention during a transaction, including revenue recognition, expense allocation, liabilities, and working capital. These are familiar concepts, yet they take on added consequence when tied to valuation and purchase terms. “These are all data points that a buyer would be looking at on your financial statements,” Janice noted.
What unsettles a transaction is often not a single issue, but timing. Items such as unrecorded accruals or state and local tax exposure have a way of surfacing late in the process.
“At the end of the day, we’re just trying to avoid anybody being surprised, the seller, the buyer,” Janice said.
Working capital, rarely a daily concern for many owners, becomes central in this context. It serves as a measure of operational continuity and a mechanism for adjusting purchase price, sometimes in ways that reshape expectations.
The episode returns to a steady idea. Financial readiness is not a final step. It is a process that benefits from earlier attention and a perspective shaped by transactions. “That’s exactly why you need someone that focuses on transactions,” Janice said.
Watch or listen to the full episode to hear how financial readiness may support more predictable business sale transactions and clearer expectations.
How We Help
AAFCPAs helps clients navigate complex buy-side and sell-side transactions with clarity and confidence. Whether selling, buying, or restructuring a business, we work to uncover hidden risks, optimize financial outcomes, and minimize tax exposure throughout the deal lifecycle. Our team coordinates across financial, tax, legal, and operational disciplines, drawing on CPAs, CM&AAs, CExPs, consulting tax attorneys, trust and estate strategists, consulting CFOs, CFP® professionals, and CGMAs. We collaborate closely with legal counsel, investment bankers, brokers, and other advisors to ensure alignment at every stage.
For sellers, we prepare financial statements that accurately reflect the business, address gaps in reporting, and translate internal records into external presentations that withstand scrutiny, with optional audits, reviews, or compilations as needed.
For buyers, we evaluate potential acquisitions from every angle, including financial quality, tax exposure, operational risk, and strategic fit, providing due diligence, structure modeling, and scenario planning to guide informed decisions. From early-stage planning and Quality of Earnings Lite analyses to negotiating final agreements, AAFCPAs supports clients in shaping transactions that reflect their goals, reduce uncertainty, and strengthen positioning, helping you move forward with confidence and clarity.
These insights were contributed by Janice O’Reilly, CPA, CGMA, Partner, Of Counsel.
Questions? Reach out to our authors directly or your AAFCPAs partner.
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