Strategists who are responsible for helping carry out mergers and acquisitions (M&A) typically must manage a lot of moving pieces. The M&A process is lengthy, and there are a lot of questions to consider before deciding to acquire a business. But some of the biggest challenges arise post-acquisition and often center around financial metrics, systems and processes.
The financial post-close challenge
Financial transformations and getting the acquired business’s finance team up to speed with new technology and processes can be a big task for the newly formed merged business. In fact, these challenges arise so often that financial transformation efforts will frequently begin before an M&A deal is closed.
Management teams are increasingly attempting to determine when and how to conduct controllership transformation efforts in addition to transactional activity. Additionally, a growing number of businesses are beginning to concentrate on revamping their controllerships by implementing analytics, modernizing their systems and investigating specialized technologies.
Three common challenges for finance and accounting teams:
1. Undeveloped or outdated financial practices that aren’t GAAP compliant
It is common among merging companies to lack fully formalized accounting metrics or processes because they are using outdated finance and accounting technology or even manually collecting data.
2. Disparate technology systems
Businesses that are struggling with financial integration will often lack confidence in the accuracy of their data because they have multiple systems that aren’t integrated with each other. In most cases, businesses with disparate technology systems can’t provide reconciling subledgers.
