KEEPING YOUR FINANCIAL RECORDS IN PREPARATION FOR AN IPO
The biggest delay encountered by companies wishing to do a reverse merger IPO is that their financial records are not sufficiently well organized in order to permit an expeditious audit of their financial statements. As in any other endeavor, is worthwhile to begin correctly from the very start. Setting up the correct procedures from the very beginning will not only help you be ready when it’s time to go public, but also help you keep your business organized.
You need primarily two things: an organized filing system, and a good software counting package. A good filing system would be either a file cabinet with lots of filing folders in it, or a good quality scanner and saving all relevant documents electronically. The best way to set this up is to spend a couple hours with your accountant, in your office. Your account should understand the kind of records and procedures your kind company would need.
In else it is also highly recommended that you use a good quality accounting software program, this need not be expensive. In fact, the most common software understood by public company accountants is QuickBooks. QuickBooks is not expensive. Either you, or one of your staff, can easily use QuickBooks to contemporaneously keep track of the financial condition and activities of your company, starting with writing checks and balancing your checkbook. QuickBooks use the same double entry accounting system accepted by all auditors needed for an IPO.
Keeping your financial statements in good shape and current, also helps you know every month whether you are making money, losing money or what kind of problems your business could have, such as failure to collect receivables in a timely basis.
Concurrently with maintaining your financial records on QuickBooks, you’ll need to keep copies of invoices as well as payments you make and revenues you receive in a way that can be tied to your financial statements. When it’s time to obtain an audit of your financial statements, as is required for an IPO, you will save an incredible amount of time and grief by being organized from the very beginning.
