When a business owner decides to explore a sale, all eyes inevitably turn to the CFO. As the financial steward of the organization, you are the architect of credibility. Investors, lenders, and buyers rely on the finance leader not just to deliver the numbers, but to ensure those numbers stand up to scrutiny.

The reality is that the best-prepared companies don’t start cleaning up their books six months before engaging an advisor. The foundation for a successful transaction is laid years earlier—long before a banker is hired or a process is launched. For CFOs, that means embracing M&A readiness as an ongoing discipline, not a last-minute exercise.

In this first article of our multi-part series on M&A preparedness, we’ll outline the key steps CFOs should take early to position their company for maximum value at exit.

Build a Culture of Financial Discipline
Buyers are not just acquiring today’s earnings—they are underwriting the quality of those earnings into the future. CFOs who ensure that financial reporting is consistent, timely, and transparent are sending a clear signal to the market. Regular GAAP-compliant statements, defensible documentation of adjustments, and strong internal controls create confidence that the company is well run. That confidence reduces perceived risk, which in turn supports higher valuations.

Invest in Robust Reporting and KPIs
Sophisticated buyers will expect a granular understanding of revenue, margins, customer concentration, and working capital dynamics. CFOs who proactively build dashboards and segment reporting (by product, geography, or customer cohort) are ahead of the curve.

Key areas to track include:

  • Revenue quality: recurring vs. project-based, churn, and retention
  • Margins: consistency, trends, and drivers of variability
  • Customer concentration: visibility into exposure and mitigation strategies
  • Working capital: cash conversion cycles, seasonality, and liquidity buffers

The ability to speak fluently about these metrics not only prepares you for diligence but also helps you run the business better today.

Establish a Regular Review Process
Just as important as defining the right KPIs is establishing a regular operating cadence around them. CFOs should institutionalize monthly or quarterly management and board-level reviews that compare actual performance to budget, investigate variances, and drive corrective action—demonstrating that metrics are actively used to manage the business, not merely reported. This discipline signals a mature organization capable of operating under institutional ownership.

Clean Up the Balance Sheet Early
Balance sheet issues often surface later in diligence, creating delays—or worse, price reductions or retrading. CFOs who take proactive steps in advance, such as resolving related-party transactions, rationalizing debt structures, cleaning up aged receivables and inventory, and addressing contingent liabilities, can significantly reduce these risks.

The cleaner the balance sheet, the fewer surprises in diligence—and the more confidence buyers will have in the deal.

Document Key Policies and Processes
Buyers want to see that the business can operate seamlessly once ownership changes hands. The CFO plays a central role in ensuring that the finance function isn’t a “black box” dependent on a handful of individuals. Documenting accounting policies, expense approval methods, payroll administration, forecasting practices, and budgeting methodologies all demonstrate scalability and reduce transition risk.

In diligence, this kind of institutional knowledge often becomes a differentiator between companies that appear less structured and those that appear ready for professional ownership.

Establishing a Forward-Looking Narrative
Ultimately, buyers pay for the future, not the past. CFOs are uniquely positioned to translate financial discipline into a credible story about growth. That requires not just a history of clean reporting but also a forward-looking forecast tied to realistic assumptions and supported by data. A compelling narrative connects the sales pipeline to visible growth drivers, lays out a rational plan for capital expenditures, and shows that projected earnings are both achievable and defensible. In doing so, the CFO moves from explaining historical results to defending the company’s future trajectory.

Conclusion
For CFOs, M&A preparedness is not a one-time project to begin a few months before a deal; it is a multi-year process of building credibility, discipline, and transparency into the company’s financial foundation. The earlier this process begins, the more leverage the owner has when the time comes to explore a sale.

In the next article, we’ll dive deeper into how CFOs can align their forecasting and working capital management with buyer expectations—a critical step in maximizing value.

ADDITIONAL RESOURCES