01
Accrual, monthly, on time
Cash-basis books cost you a turn of EBITDA in valuation — and a month of diligence pain. Move to accrual at least 24 months before a transaction so the trailing 12 months are clean.
- Monthly close completed by business day 10
- Revenue recognized when earned, not when collected
- Expenses matched to the period they relate to (prepaids, accruals)
- Inventory counted at minimum quarterly, ideally cycle-counted monthly
- Account reconciliations documented for every balance sheet account