October 1, 2025 By: Trey Gailey, Nate O'Brien When it comes time to transition your business, whether selling, bringing in a partner, or simply planning for the future, messy financials do not just cause stress; they directly reduce value. Buyers and advisors assign risk when they see gaps or delays in your numbers, and that risk translates into lower offers. Table of Contents Three Signs Your Financials Are Holding You Back Messy financials can quietly but significantly hinder a business in several ways. Here are three ways that disorganized or unclear financial management might be affecting your growth, decision-making, and overall success. You cannot produce timely reports: A prospective buyer requests a balance sheet as of June 30, 2025, and you are unable to generate it quickly with confidence that it is accurate. Your numbers invite questions instead of trust: Imagine you run a distribution company, and a buyer tries to calculate working capital. They flag inventory as being significantly lower than what you had previously discussed. In reality, you have the inventory, but because it was poorly reported, the numbers make your business look weaker than it is. What should have been a simple calculation turns into a drawn-out back-and-forth that damages confidence in all your numbers. Your accounting staff is stretched too thin: You rely on an “office manager” who is handling HR, payroll, vendor calls, and just about everything else that comes across their desk. As the business grows, the accounting responsibilities become more complex, but they lack the capacity and training to keep up. The result is financials that fall behind or contain errors, not because the individuals are careless, but because the role has become impossible for one person to manage effectively. When Growing Pains Show Up in the Numbers These situations rarely come from bad intent; they’re the natural result of growth. The systems and people that once worked fine for tracking the books can suddenly fall behind as your company scales. What felt manageable when you were smaller now creates blind spots that show up when someone outside the business asks questions. Common Problem Areas You Might Recognize Misclassified Expenses: A buyer compares your 2023 and 2024 expense lines and notices that the same cost is categorized differently each year, making it difficult to compare margins and identify trends. Unreconciled accounts: A bank statement does not tie out to your general ledger, and your balance sheet balance is off by thousands. These gaps raise red flags about accuracy and internal controls. Miscellaneous expense buckets: One year, your “miscellaneous expense” account shows a few hundred dollars, and the next year it jumps into the tens of thousands. Significant, unexplained swings in catch-all categories raise doubts about the reliability of the entire income statement. The Right Level of Accounting Support Not every company needs a full-time controller or CFO. At the same time, relying on staff who are not trained for the complexity of accounting at scale puts your business at risk. This is where outsourced accounting can be the right fit. You get professional-grade financials without taking on the cost of another senior hire. The Payoff: More Value, Less Stress Clean and timely financials do more than prepare you for a sale. They help you run the business better today. You can see true margins, understand cash flow, and make decisions with confidence. Your employees can spend more time on their core responsibilities, such as growing sales, serving customers, and managing operations, instead of wrestling with accounting tasks. When the time does come to sell or transition your business, you will already have the systems and reporting in place to maximize value. Our outsourced accounting practice team helps business owners move from reactive bookkeeping to professional-grade accounting. The result: accurate and timely financials that increase confidence, reduce stress, and support higher business value. Please contact us if you have any questions or need assistance. Author: Trey Gailey, CPA Trey Gailey became an integral part of the KatzAbosch team in 2013. He currently serves as the Managing Director of BlueStone Services, LLC, KatzAbosch’s outsourced business solutions subsidiary. Trey holds the position of Director of Accounting Solutions. Bringing a wealth of experience in providing accounting services across diverse industries such as medical practices, distribution, and legal services, Trey plays a crucial role in guiding clients not only in the United States but also in various international regions. His expertise extends to international tax compliance, complementing his thorough understanding of domestic U.S. tax law. As a key leader for the firm, he drives innovation, fosters collaboration, and cultivates a culture of excellence, thereby propelling the firm and its subsidiary, BlueStone Services towards sustained growth and success. Get in Touch: Δ URLThis field is for validation purposes and should be left unchanged. First Email What Can I Help You With? Author: Nate O’Brien, CVA, CEPA Nate O’Brien is a Senior Manager with KatzAbosch’s Business Valuations Services Group. He has over 10 years of experience and is responsible for performing and overseeing valuations of closely held businesses and asset-holding companies. Nate has conducted valuations for a variety of purposes, including goodwill impairment analyses, purchase price allocations, equity-based compensation, S corporation conversions, and estate and gift tax. He works with various industries, including professional services, industrials, consumer products/services, and government contracting. Additionally, Nate specializes in supporting healthcare provider businesses with fair market valuations for federal Stark and Anti-Kickback purposes. Get in Touch: Δ PhoneThis field is for validation purposes and should be left unchanged. First Email What Can I Help You With? Related KatzAbosch Articles Know the Rules on Business Travel Four Business Functions You Could Outsource Right Now How to Survive COVID-19: What’s Next for Your Business?