Guest Post: Neal Isaacs, "Advice on Accountants (for what it's worth)"

VR Business BrokersToday's guest post is from Neal Isaacs. Neal Isaacs, MBA, CBI is a Business Broker and the owner of VR Business Brokers of the Triangle, located in Raleigh, NC. He writes about business and helps business owners discover their exit options. Call (919) 628-0571 or email [email protected] for your free consultation. Learn more at




As a business broker, I answer a lot of questions about how to sell a business.  One of my FAQs that I share with all business owners planning to sell is about the total cost to sell a business.  

People don’t think about costs in selling a business.  The first question people always think is “How much can I get?” but the truth is:


It’s not how much you make, but how much you keep that matters.


So how much will you keep?  What will be left depends on how much it costs to sell a business, as well as your tax treatment on what you get.  Costs toTall Buildings sell a business, if you don’t consider paying off your debts, are primarily professional fees. Consider the investment in a business broker, as most business sellers are doing it for the first time, and the sale of a business is a complicated and convoluted transaction, and consider the costs of a business attorney.


You’ll also want to consider the costs of a accountant.  Chances are sellers are already using these advisors, but there may be some additional costs for updating or adjusting P&L statements.  

Depending on your time frame for the sale of your business, there may be more that can be done from an accounting perspective to increase the value of your business from a buyer’s perspective.  Let’s consider:


How Far?

The “look-back” period for the sale of a business is normally three years, but some buyers will ask for five.  If you’re planning to sell your business in the next couple of years, it’s wise to communicate this fact to your accountant, and to start working with a business broker.  Preparing and highlighting the best financial aspects of your business is something a good business broker can help you with in conjunction with your accountant.


The fact of the matter is, running a business to sell is different than running a business to support a lifestyle.  The IRS has a lot of rules that your accountant will know and guide you on regarding how much you’ll have to pay in taxes, but a good accountant will also know how to protect you from paying too much tax in a legal and ethical manner.


How Much?

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It may sound obvious, but don’t be afraid to ask an accountant how much they charge, or at least to give you a range of what to expect.  Different accountants charge different prices for similar work because they have different costs to run their businesses, and they bring different experience to each opportunity, so interview your prospective accountant to learn if they are bringing the right skill and experiential sets that you need.  


Do We Fit?


When picking an accountant, it’s good to ask them about what their client base looks like.  You’re accountant will know exactly how much money you have, and the size of your business eventually, so consider being up front with them in your first meeting if for no other reason than to ask them if your business resembles their current book of business.  If your business is an outlier, they may simply not be reviewing the tax code and regulations related to the needs of your business.


Too Much?


I have seen one person pay $400/hour for financial due diligence on a deal for buyer representation, and it was way too much.  The CPA on the buyer’s side was more than willing to ask questions and go down paths that were not germane to the deal at hand, in part because he was being paid by the hour, and in part because his client hired him to investigate, and he was used to investigating very complicated businesses.  This was not a complicated business, and in my opinion this buyer brought a cannon to a knife fight (and paid for it).


Whether you’re a buyer or a seller, picking the right accountant, or even upgrading to the right accountant, can pay for itself.  Especially after the sale, when you have to deal with the financial repercussions of capital gains (this is another great question to ask your accountant early if you’re a seller).

If you need help choosing or interviewing an accountant in preparing for the sale of your business, I can help.  Email me at [email protected] and I’m happy to share some questions that you could ask an accountant that you’re considering hiring.