|  |  | | If your organization is actively looking to acquire another company, preparing for a merger or maybe already did the acquisitions, please let ME CFO help you.
Integrating the financials after the M&A is a crucial part of the process. Finances can get tricky when you combine two companies, so you must ensure financial controls are in place. Be proactive and plan out the following steps.
- Create a timeline: Develop a timeline to show which activities need to be addressed. Provide deadlines for when they should be accomplished. For example, in the first week following the M&A, establish benchmarks, identify key personnel, and review bank relations. By the end of the first month, meet with management, distribute a code of ethics, and address any employee concerns. Within the first six months, aim for full integration of IT systems, established reporting conventions, and identified high-potential individuals. If you don’t have these things done according to your timeline, don’t panic. Adjust accordingly and make sure you come back to them.
- Evaluate finance and accounting personnel: One of the first things an acquiring firm should do is assess the skills and capabilities of the financial team. Doing so will help determine which members can stay, which need to be reassigned to a new department or position, and who needs to be let go. This process is also a good time to address any employee concerns and questions. The remaining staff will be entering a strange new world and will look to you for guidance and assurance. Management should meet with the team as soon as possible and communicate everything about the M&A.
- Safeguard business assets: When two companies merge, members in the financial departments should identify and safeguard existing assets and ones that have been acquired. This process also involves assessing any potential areas of concern.
- Ensure the adequacy of financial controls: First, management should assess financial controls to ensure that they are compliant with regulations and laws. The regulatory framework and its operations must be thoroughly examined. Draw up a list of all the scheduled authorities, including areas such as hiring and firing, investment decisions, bank mandates, etc.
- Review IT systems: It can be a big challenge to integrate two or more different IT systems, conversion from IFRS to US GAAP, different currencies etc. and the process can be tricky. It may not even be possible, and an entirely new system may have to be implemented. It’s critical to understand and assess the current systems’ strengths and weaknesses. The acquiring company should also identify the existing and future state of the IT architecture.
M&As require close attention to contracts and due diligence. It is equally important to maintain communication and transparency throughout the whole process to build trust with all parties involved, from stockholders to employees. Reprocessing your financials after a merger will help you to integrate business operations effectively and achieve new, streamlined processes throughout the organization.
If your organization is actively looking to acquire another company, preparing for a merger or maybe already did the acquisitions, please let ME CFO help you.
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