The Initial Public Offering (IPO), the process of selling your company’s stock to the investing public, is a potentially thrilling journey to wealth and liquidity. Getting there can be a daunting process, however. It doesn’t have to be. By implementing a sound strategic planning process and investing in a modern ERP system, you can set your business up for success and experience a successful IPO. This blog post will discuss how strategic planning and ERP systems work together to help companies to achieve their IPO goals.
Act Like a Public Company
As the label suggests, a public company shares a great deal of its formerly private information with the public. In the United States, this comes in the form of quarterly (10Q) and annual (10K) filings of financial statements with the Securities and Exchange Commission (SEC). An accounting firm will also audit your financials and publish an auditors letter describing their findings every year.
The publicizing of financial information starts with the IPO process. The investment banks (underwriters) that arrange to shell shares in your company will conduct thorough due diligence, including audits of financial statements, review of contracts, pending litigation and much more. It’s an exhaustive and exhausting process.
To avoid running into obstacles to an IPO, and frayed nerves in general, the best practice is to start acting like a public company well before even contemplating an IPO. This means having getting your financial statements audit-ready and assembling other required documentation before going public.
Once listed on a stock exchange like the NYSE or NASDAQ, your company will need to comply with reporting requirement like the 10Q and 10K. There will also be “earnings calls,” where you have to explain to stock market analysts how your company is expected to perform in upcoming financial periods.
The time to get ready for these obligations is a good 12 to 18 months before the IPO. Doing so allows you to troubleshoot issues that might jeopardize an IPO’s success and expose non-compliance. Financial reporting is vital, but it should not be the only thing you focus on. Instead, try a comprehensive that includes processes, people, and technology.
Acumatica cloud ERP, which includes robust accounting and financial management features, can help with this by providing a central source of real-time information and analysis that alleviates manual research. Acumatica’s sophisticated financial management tools allow customers to adhere to demanding SEC reporting standards while also providing complete auditing. It offers 360-degree views of the business and one unaltered version of the financial truth.
Make Your Finances Public Company-Ready
Complying with public company reporting requirements means creating accurate financial statements. This requires accessing transparent and current data. Without question, automated and reliable reporting is indispensable for this purpose. Acumatica can help with sales and revenue forecasts for each quarter and a breakdown of how the actual performance compared to expectations.
Organizations looking to go public can’t afford to make any mistakes. You need systematic processes to take care of routine IPO and public company reporting tasks quickly. You also need to generate auditable reports efficiently.
Acumatica enables the achievement of these objectives by supporting IFRS and GAAP standards for use tax, sales tax and value-added tax (VAT), fixed asset depreciation rules and financial regulation. In addition, our modern ERP system automates many routine tasks. It generates auditable reports quickly and easily, giving businesses the peace of mind that they meet all the requirements for going public.
Attract Underwriter and Investor Confidence
To go public, you need to gain the confidence of underwriters, industry-thought leaders, analysts and investors. With the right ERP solution in place, businesses can show these audiences that they have a handle on their finances and can meet revenue goals. Acumatica’s applications allow partners to access a central location of real-time information and analysis, so they won’t have to waste time researching manually. This, in turn, will give businesses the confidence they need to attract underwriters and investors.
Promote IPO Readiness and Profitability with Acumatica
Acumatica provides the modern ERP solution companies need to comply with SEC and Sarbanes-Oxley (SOX) compliance requirements. It also gives all IPO stakeholders real-time access to detailed financial information. Acumatica offers a comprehensive yet flexible solution that will support your business before, during, and after an IPO. With Acumatica in place, you’ll have the foundation you need to ensure a successful IPO.
Get in touch for more information on how Acumatica can help your business prepare for an IPO.