Preparing a Healthcare Services Company for Sale
Situation
A growing healthcare services company was preparing for a sale but lacked reliable financial data to support the process. After years of acquisitions, the business was operating across five separate accounting systems, with financials consolidated manually in Excel. The underlying accounting records were not being maintained consistently, resulting in errors, an unbalanced balance sheet, and limited visibility into performance.
At a critical point in the company’s lifecycle, the finance function became unstable with turnover in the finance team. Without accurate financials or structured processes, the company was not positioned to withstand due diligence or move forward confidently with a transaction.
Approach
Our team quickly integrated with the leadership to stabilize the transition and assess the integrity of the financial data. Early in the process, we identified a material imbalance in the balance sheet, with a discrepancy exceeding $7 million.
We rebuilt the balance sheet from the ground up, vouching each account, tracing historical activity, and identifying unrecorded liabilities, misstated assets, and prior-period expenses that had not been properly captured. Through this process, we quantified and corrected the $7 million discrepancy, ensuring all balances were fully supported and aligned with underlying activity.
This included resolving duplicate expenses, consolidating accounts payable across multiple systems, bringing bank reconciliations into the accounting platform, and properly recording previously misstated or missing liabilities.
We implemented a new accounting system as a single source of truth and established a disciplined month-end close process. As we cleaned up historical data, we also aligned ongoing reporting, updated beginning balances, and ensured accurate financial statements moving forward.
In parallel, we worked closely with the company’s tax advisors and independent accountants to support amended filings and reviewed financial statements required for lending and transaction readiness. We also documented processes and internal controls to ensure sustainability.
Results
- Balance sheet fully reconciled and supported, including resolution of a $7M+ historical discrepancy
- Scalable financial foundation to support a successful sale
- Clear visibility into financial performance, with the leadership team equipped with a budget and a forecast
- Structured and efficient month-end close process
- Internal controls and standardized workflows mitigating risk
- Strengthened confidence across the accounting team and leadership
As a result of clean, well-supported financials and improved reporting structure, the client successfully completed the due diligence process and moved forward in their transaction with confidence.
