Why You Should Farm Out Business Valuation to Specialty Firms
A 2014 Grant Thornton International Business Report indicates that 29% of privately-held businesses worldwide expect to transfer ownership within the next ten years. This points to the significance of accurate business valuations. Whether or not a business anticipates a change of hands or is trying to get a better understanding of the marketplace, proper business valuation is crucial.
Accounting services are often branded under a sole, universal category. Nonetheless, different levels of certification allow CPAs and specialty firms the opportunity to work together in a team-oriented fashion that helps increase efficiency for clients that are in need of company valuation services in New York City.
Credentials to Look For When Hiring an Expert
There are several factors that limit certain CPAs’ adeptness to provide a proper business valuation. Business valuation experts enjoy the advantages of being credentialed by one or more organizations. Four of the most prominent credentials are:
- The Accredited in Business Valuation (ABV) – American Institute of Certified Public Accountants or AICPA,
- The Certified Valuation Analyst (CVA) – National Association of Certified Valuators and Analysts,
- The Certified Business Appraisers (CBA) – Institute of Business Appraisers, and
- The Accredited Senior Appraiser (ASA) – American Society of Appraisers.
Appropriate credentials should be one of the top criteria considered by clients in selecting and hiring an expert.
Benefits of Hiring Independent Firms
CPAs that perform traditional accounting or attestation services can be vulnerable to conflicts of interest when it comes to business appraising services. Business valuation firms, on the other hand, are independent and unattached to any side of a negotiation or litigation.
In addition to training and independence, firms that specialize in business valuation accumulate vast portfolios of clients and cases that reflect their professional experience. Outsourcing business valuations to specialty firms gives CPAs an advantage.
Business valuation experts have access to databases and similar subscriptions that provide the most current data and keep them up-to-date with methodology advancements. For the valuation of a business to be cost-effective, CPA firms must be fluent in the appraisal and valuation process. Specialists also compile a myriad of appraisal-specific experience over their careers, therefore, they can do the job faster. Less time spent on the job results in fewer hours billed. Additionally, a faster process can help expedite other types of accounting work.
By reaching out to an expert, CPAs can act as intermediaries between clients and the valuator. The CPA maintains avenues of communication and monitors all information and interactions between the client and the specialist. Business valuation experts, therefore, are a peer with CPAs, performing specific appraisals and letting the CPAs direct interaction between them and the clients.
Engaging a New York City company valuation expert sends the message that the engagement will be thorough, which shifts the balance of perceived negotiating power during times of litigation. Moreover, if need be business valuation experts are a source of unbiased and independent opinions and can testify as witnesses during legal proceedings.
Special certifications, expert training, and an independent status are among the top reasons why valuation specialists can provide cost-effective and efficient appraisal services to CPAs and their clients. A higher number of business owners intend to transfer ownership in the upcoming years, fastidiousness in business valuation is critical. To read our whitepaper on this topic please click below. Also feel free to call our New York City office if you or your client require such expertise.
More Business Valuation Whitepapers
- Why You Should Farm Out Business Valuation to Specialty Firms
- Understanding Risk in Business Valuation
- Identifying Business Perks
- Normalizing Owners’ Compensation in Business Valuation
- An Attorney’s Guide to Understanding Business Valuation Standards
- Valuing Small Businesses
- 8 Minefields to Avoid Before Presenting Your Valuation Report to the Court Cross Examining a Financial Expert – Part I
- A Panel Discussion on Proposed Maintenance Guidelines
- Valuation Issues in the Bankruptcy Process
- IRS Job Aid Resource Guide