The importance of industry experience in financial due diligence

Undertaking financial due diligence is a fundamental step in the process of selling a business. This comprehensive review of a company’s financials, market trends, and regulations can identify risks and opportunities that might impact the sale process. Critical to this part of the process is the importance of industry experience in financial due diligence.

In our latest insight, we examine the importance of industry experience in financial due diligence and how business owners in Scotland can benefit from Consilium’s extensive sector-specific knowledge.

Why industry experience in financial due diligence matters

Every industry has its unique characteristics, challenges, and regulations. For instance, the construction industry requires knowledge of building standards, planning regulations, and supply chain management, while the healthcare industry has specific regulations and licensing requirements that must be understood.

Without industry-specific knowledge, it is easy to overlook critical compliance issues, underestimate potential costs, and inaccurately value the business. Therefore, industry-specific expertise is critical to ensure thorough financial due diligence.

Why you should hire a chartered accountant with industry-specific expertise

Choosing an independent firm of chartered accountants with industry-specific expertise to conduct financial due diligence offers several benefits, including:

• Accurate valuations: Industry experience lays the foundation for an accurate business valuation based on the specific characteristics and market trends of the sector in question. This helps business owners to receive a true price for their business and supports a successful sale

• Risk identification: Industry-specific expertise enables the firm of chartered accountants to identify potential risks that may impact the sale process

• Opportunity identification: an accountant with previous industry experience will be best placed to identify potential opportunities that may increase the value of the business. This includes market trends and other factors that may contribute to a successful sale and increased value

• Compliance assurance: an accountant with industry-specific experience is more likely to be aware of the specific regulations and legislation that impact the sector in question. This helps contribute to a sale process that is compliant with all relevant regulations and requirements. In turn, this reduces the risk of the deal falling through or potential issues in the future.

Let Consilium’s industry expertise add value to your business

When a financial due diligence exercise is required, it can be tempting to use existing advisors or accountants. However, appointing a firm of chartered accountants with industry-specific expertise opens up greater scope to identify potential risks and opportunities.

Consilium Chartered Accountants have extensive experience and expertise in the following Scottish business sectors:

• Construction, infrastructure and energy
• Distribution and consumer goods
• Engineering and manufacturing
• Food and drink
• Healthcare and education
• Hospitality and leisure
• Logistics
• Professional practices
• Retail and wholesale
• Technology.

To discuss how Consilium Chartered Accountants can help you achieve your goals or to enquire about our financial due diligence services, contact our Corporate Finance partners Linzi Wilson or John Blair.

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