Selling a business is a complex process and accountants have a crucial role to play in ensuring their clients achieve the optimal financial outcome. Niall Gaughan explains how
As the financial landscape continues to evolve, accountants in Ireland are finding themselves at the forefront in helping to guide clients through the intricate process of selling a business.
Beyond the immediate considerations of the sale itself, the post-sale period is critical to ensuring optimal financial outcomes.
In this article, we explore the key elements accountants should consider when advising clients on selling a business, focusing on the importance of securing future financial stability, fostering strategic partnerships and succession planning.
Anticipating the post-sale landscape
Accountants must highlight the importance of proactive planning before a sale.
Understanding the details of the financial landscape post-sale allows business owners to make informed choices that can have a significant impact on tax responsibilities, wealth preservation and overall financial health.
This can help to ensure that clients are well-equipped to navigate any complexities that may emerge after the deal closure.
Securing future financial stability
Securing future financial stability post-sale is a critical consideration for both business owners and their advisors.
Central to this endeavour is expert tax advice. Accountants play a pivotal role in guiding clients towards understanding the tax implications associated with a business sale.
By carefully examining available reliefs, exemptions and allowances, accountants can help maximise after-tax returns, providing a solid foundation for the future.
For instance, a comprehensive understanding of various reliefs can lead to substantial tax savings, laying the groundwork for securing the financial future of both the seller and the business.
Fostering strategic partnerships
When navigating the complexities of a business sale, fostering strategic partnerships is crucial.
Accountants must pay careful attention to the strategic structuring of the sale, assessing alternatives such as selling shares or assets with a keen eye on the potential implications for both buyers and sellers.
By leveraging their expertise and collaborating closely with other advisors, accountants can help clients select a structure that not only aligns with their financial goals but also fosters long-term strategic partnerships.
These partnerships are crucial because they can provide significant tax advantages and facilitate a seamless transition process.
Moreover, by aligning the interests of all parties involved, strategic partnerships lay a strong foundation for ongoing collaboration, which is essential for future growth and success.
Securing the future beyond the sale
Post-sale success is not solely contingent on immediate financial gains. Accountants should advocate for robust succession planning, especially within family businesses, considering factors such as family dynamics, business continuity and long-term financial objectives.
By engaging in proactive succession planning, clients can safeguard their wealth, ensuring its sustained growth and the realisation of personal and family goals.
This approach not only secures the financial future of the business but also aligns with the long-term vision and values of the family, setting the stage for continued success across generations.
A strategic partnership for wealth management
In the post-sale phase, a private banker with specialised competencies can support the unique requirements of handling the proceeds from a business sale. The business owner’s accountant can play a key role in selecting a private banker suited to their unique needs. Their competencies should include:
- Wealth preservation expertise: A private banker who understands wealth preservation strategies can help the client build a lasting legacy.
- Investment strategy: Competent private bankers should be adept at devising investment strategies aligned with the client's risk tolerance and financial goals, ensuring the continued growth of their wealth.
- Diversification and risk management: A private banker should be able to assist clients in diversifying their investment portfolio, mitigating risks associated with concentrated assets and optimising long-term returns.
- Personalised service: The ability to craft personalised financial plans that encompass the client's lifestyle, philanthropic aspirations and intergenerational wealth transfer, is a key competency for a private banker in this context. Clients are now keen to understand more about philanthropic options and sustainability. A good private banker should be able to facilitate access to deep knowledge and subject matter experts in these areas.
Clients need a secure financial institution with a strong credit rating that offers immediate returns on their funds post-sale.
Confidentiality and direct access to a private banker can help, as they will have access to expertise in financial markets and the ability to educate clients who are often experts in their fields – but not necessarily in financial management.
Ensuring post-sale success
The role of the accountant supporting a client through a business sale extends beyond the realms of financial statements and tax calculations.
By proactively addressing the considerations outlined – expert tax advice, strategic structuring, succession planning and selecting the right private banker – accountants can guide their clients towards post-sale financial triumph.
Niall Gaughan is a Director with Barclays Wealth in Dublin
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