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Business Evaluation CheckList: Financial
Finance Alternatives
- Are all types of finances and lengths of loans balanced against the purpose funds are borrowed for?
- Are arrangements in place for overdraft protection?
- Have future cash and/or loan requirements been determined?
Profit and Cash Flow Planning
- Are budget projections prepared?
- Is an incentive plan in place to encourage employees to exceed budgets?
- Are cash flow requirements known for the next three months?
Credit
- Is there a defined credit policy?
- Does credit policy cover: payments, discounts, interest, reference requirements, and credit bureau checks?
Credit Procedures
- Are all credit terms clearly explained in writing to the new customer?
- If new customer isa company, is there a personal guarantee from the owner or company officers?
Recording System
- Do invoices clearly communicate terms and conditions of payment?
- Does the accounting system provide accounts aging for 30/60/90 days?
Collections
- Is a defined written collection policy in place?
- Are discounts offered to encourage early payments?
Accounts Payable Management
- Is a monthly accounts payable aging completed?
- Is the accounts payable aging tied to cash flow projections?
Insurance
- Have all policies been reviewed in the last 12 months?
- Are rebates and discounts offered by insurance companies for certain physical or procedural situations?
Fire Insurance
- Has policy premium reduction been requested for fire prevention equipment installed on the premises?
Burglary Insurance
- Does policy cover: inventory, equipment, furniture, theft, and vandalism?
Public Liability Insurance
- Has policy been reviewed for coverage of: goods sold, parking lots, etc.?
Motor Vehicle Insurance
- Have company drivers driving records been examined?
Workers Compensation Insurance
- Are all available discounts being taken?
Personal Accidents and Sickness Insurance
- Are employees covered for accidents occurring off the business premises, after hours?
Business Interruption Insurance
- In event of total destruction, have costs to continue business been considered?
Life Insurance
- Have "old" policies been reviewed to determine whether they are still applicable and relevant?
Key Man Insurance
- If there is key man insurance coverage, is it adequate and reviewed regularly?
Premises Lease
- Are all option exercise dates known?
Equipment Leasing
- Has sale leaseback or a renegotiation of leases at lower interest rates been investigated?
Office Supplies
- Are competitive quotes sought from numerous suppliers?
- Are office supplies secure from staff "helping themselves?"
Income Taxes
- Has an accountant reviewed business structure to ensure that tax benefits are maximized?
Sales Taxes
- Have regulations been reviewed to ensure that taxes applicable to goods are correct?
- Are all discounts deducted when determining the amount of sales tax payable?
Property Taxes
- Are all concessions, rebates, and exemptions offered under property tax regulations being used?
Payroll Taxes
- Are procedures in place to ensure that returns are submitted on time and correct wages declared?
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