Every year we see the same pattern. A business owner decides they are ready to sell, then pauses and says, “I’ll just wait until we get the year-end accounts finalised.”
It sounds sensible. It feels responsible. But in practice, it is one of the most common timing mistakes sellers make, and it can cost months of momentum that are difficult to recover.
Here is why.
In Australia, most businesses operate on a financial year ending 30 June. The finalised accounts from an external accountant typically land somewhere between August and October, sometimes later. By the time those accounts are reviewed and the Information Memorandum is prepared, we are looking at a market launch in October or even November. That leaves a few short weeks before the Christmas and New Year shutdown brings everything to a halt.
Buyers go quiet. Accountants, Lawyers and other Advisors take leave. Decision-makers are unavailable. The momentum that should be building through meetings, offers and negotiations simply evaporates. Come February, the process has to be restarted. Updated trading information is required. Interested parties who were engaged before the break may have been distracted and moved on to other opportunities. What should have been a continuous, well-managed process becomes stop-start, and that is where deal fatigue sets in.
Time is not neutral in M&A. An oft quoted saying is ‘time kills deals’. Extended timelines introduce risk, erode confidence on both sides and give small issues room to grow into larger problems. A two-month pause in the middle of a sale process is exactly the kind of disruption that can derail otherwise strong transactions.
The alternative is straightforward. Start earlier with interim management accounts.
A business does not need audited or finalised year-end accounts to begin the sale process. What we need is a reliable set of management accounts, monthly or quarterly, supported by the previous three years of trading history.. That is enough to build the financial workbook, conduct our normalisation analysis and prepare the Information Memorandum.
At DMA, we build a comprehensive financial workbook for every transaction. This workbook provides a complete audit trail from the raw accounts through to normalised earnings, with every adjustment documented and defensible. Prospective investors receive this alongside the Information Memorandum, giving them full visibility into the financial logic underpinning the opportunity. The workbook does not depend on having a finalised set of statutory accounts. It depends on having accurate, current data, and management accounts provide exactly that.
For many owner-operated businesses, this point is particularly relevant. These businesses often rely on their external accountant to prepare year-end financial statements, and the turnaround can be months. Meanwhile, the owner’s own management accounts, the numbers they use to actually run the business, are current and reflect trading reality far more accurately than statutory accounts that may be six to nine months behind.
For businesses with sound internal controls, monthly management accounts are more than adequate.., The data is timely and reflects where the business actually is, not where it was the better part of a year ago.
This is particularly relevant right now. As businesses close off their March quarter, some owners will be tempted to hold off until June figures are complete. That decision, which feels like prudence, pushes the entire timeline back by months and risks landing squarely in the pattern described above.
If you are a business owner who has been thinking about a sale, the question to ask is not “do I have my final accounts?” It is “do I have reliable, current management accounts?” If the answer is yes, the process can begin now.
And if you are an advisor supporting a client through that decision, the best thing you can do is help them avoid the year-end trap. A conversation with a specialist M&A advisor can save months.
The year-end accounts will come in due course. They do not need to be the starting gun.
Author: Tony Brown
