Part 3 of 3: Integration, Tax, and the Long Tail of M&A
3-Part Series – How Accountants Steer M&A—A Lawyer’s Insight
Closing day is a milestone, but it’s not the finish line. Post-close, the real work begins. Integration, tax structuring, and compliance all come into play. And once again, accountants are at the center of it.
Integration: Where Systems Meet Strategy
Post-merger integration is where good deals go bad. Incompatible accounting systems, misaligned payroll processes, and inconsistent reporting can derail even the best intentions.
Suppose the buyer and seller use different accounting software, like QuickBooks, Xero, or even custom spreadsheets. If those systems aren’t aligned, it could delay post-close financial reporting and create confusion around key metrics. In some cases, that kind of delay could affect earnout tracking, covenant compliance, or even tax filings. When accountants are involved early, they can help identify these gaps and plan for a smoother transition.
In situations like that, accountants may anticipate integration challenges, but if they are not brought in early, it can be difficult to plan around them. When accountants are involved in integration planning from the beginning, they can help align bookkeeping systems, reconcile chart of accounts, and establish reporting timelines that support a smooth transition. Their foresight can be key to keeping post-close operations on track.
Tax Structuring: Collaboration Is Key
Tax efficiency is often the difference between a good deal and a great one. And it’s where accountants and lawyers must collaborate closely.
In some transactions, the deal structure might take shape before tax planning opportunities are fully explored. If net operating losses (aka NOLs) are available but not factored into the approach, it could lead to a missed chance to offset taxable income. That kind of oversight could result in a higher tax bill and unnecessary frustration for the client.
When accountants are involved from the start, they help navigate step-up basis, allocation schedules, and cross-border issues. They bring insights that shape legal form, and save money.
Legal Implications of Integration Delays
Integration isn’t just operational, it’s legal. Delays can breach representations, violate covenants, and expose the buyer to liability. Accountants help mitigate that risk by flagging issues early and building realistic timelines.
In a typical transaction, payroll systems might not be fully aligned at closing. If integration is delayed, it could lead to missed tax filings or reporting errors. That kind of disruption could result in penalties and raise questions about compliance with representations in the agreement. With earlier coordination and planning, many of these risks could be identified and addressed before they become issues.
The Takeaway
Post-close success depends on collaboration. Accountants lead integration, shape tax strategy, and help ensure compliance. When lawyers and accountants work together, they don’t just close deals, they build lasting value.
Final Thoughts
From early diligence to post-close integration, this series has explored how accountants and lawyers shape deals together. Each phase brings unique challenges—and opportunities for collaboration that protect value and drive better outcomes.
I appreciate the time and attention you’ve given to this series. Whether you’re a business owner, accountant, or advisor, I hope these insights help you approach your next transaction with clarity, confidence, and the right team around the table.
To learn more, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.