SOURCE: Mew & Company

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November 28, 2016 18:18 ET

Vancouver Accountants Offer Tips on Small Business Acquisition

Vancouver accountants offer solutions to minimize due diligence costs in latest blog

VANCOUVER, BC--(Marketwired - November 28, 2016) - As a group of Vancouver professional accountants, Mew + Company understands that there are many reasons to acquire a small business. Some of these include buying out a competitor or adding synergy to an existing holding. At times, an acquisition may be small-so small, that a buyer's cost-benefit analysis may determine that large accounting fees for due diligence work simply aren't worth it. However, a happy middle ground exists. For more, go to: http://www.mewco.ca/blog/buying-small-business-canada-minimize-due-diligence-costs/

The temptation to minimize costs is always understandable. However, it's now possible for many accountants to perform due diligence at a reasonable cost. The technological capabilities inherent in current accounting software, coupled with the current CRA online reporting abilities, make some key elements of due diligence much faster and easier to perform than in the past.

With the online reports available through the CRA, a business can print its entire filing history and results immediately upon request. This includes corporate tax, GST, and payroll filings histories. A potential buyer can obtain this information and compare it against the financial information that's being provided.

Corporate tax and GST returns can be used to verify sales and expense figures being asserted. A seller may be biased towards inflating sales and deflating expenses. But if these biases are embedded into the tax filings, the tax cost is expensive, at a corporate tax rate of 13% and GST rate of 5% in the province of BC.

Similarly, payroll filings can be used to verify the number of employees. Sometimes shareholders and family members may be contributing to a business without being compensated at a full rate-a costly expenditure down the road! The ability to retrieve these reports directly from the CRA gives a buyer added reassurance.

The bottom line is that the ready availability of CRA reports reduces how much needs to be spent on professional fees. When combined with the fact that most businesses use accounting software with readily extractable data and reports, it's much easier for professional accounting firms, like Mew + Company, to fact check and guarantee a buyer's peace of mind at a reasonable cost.

About the Company

Mew + Company Vancouver, is an ideal solution to the taxation problem. With a simple philosophy of building long-lasting customer relationships, the company has been serving corporate clients in a variety of fields-including restaurants, real estate, retail, and the service industry. Investing in their specialist services will undoubtedly be fruitful for all kinds of clients.

To learn more about Mew + Company and discuss their services, log on to http://mewco.ca/

Contact Information

  • Lilly Woo, CPA, CA, CFE, CFP
    Mew + Company Chartered Professional Accountants
    604 688 9198
    Company Website: http://www.mewco.ca