M&A Finance Integration Plans, Charters, Checklists, Presentations Synergy Tracking Tools, and Best Practices
Finance and accounting has many responsibilities during an M&A integration including standardizing accounting policies, harmonizing budgeting and planning, making staffing decisions, consolidating and closing the books, and tracking integration synergies and costs.
Along with managing the additional integration workload, Finance has to continue to meet legal requirements and deliver timely and accurate data for decision making.
The documents in this section of the web site can help finance and accounting teams scope and plan their integrations and track their progress.
M&A Finance Day 100 Integration Plan
Over 110 Finance initiatives/tasks to be completed in the first 100 days after close.
Determine org chart for F&A
Determine employee retention plan for F&A
Obtain inventory of Company B accounting policies
Determine plan for migrating Company B to Company A policy & procedures
Apply Company A's Management Reporting structure to Company B
Map chart of accounts
Obtain a closing timetable for Company B ...
Finance: 4 M&A Integration Charters from Different Acquisitions
Excerpt from First of Four Charters
PreClose / Planning
- Retention Plans: work with teams to define costs
- Day 1: Ensure plans developed to ensure readiness for Close
- Org. Structure: Finance team migrates to Acquirer reporting Day One
- 2018 Spend: schedules reviews to control and manage; identify opportunities to reduce spending (duplicate functions, projects, activities); control payables and accruals
- Rev. Rec. / ASC 606: align accounting treatment; revenue roll forward; forecasts
- Earnouts: establish collaborative Investment planning and decision-making processes
- Audits: complete Acquired Co. audit by Sep.15; define ongoing SEC compliance requirements
- FP&A: align Management Reporting, define budgeting process, policies ...
M&A Synergy-Based Incentive Plan
Synergy Plan Overview
- Executives have a synergy-based incentive target on top of the current annual incentive plan (AIP)
- Department heads will have the ability to allocate discretionary pools to other employees
- Eligibility: Management plus other employees involved in workstreams
- Synergy goals are set as an add-on to the current AIP
Post-Merger Integration Cross-Border Finance Plan
7-Page Finance Plan from a Cross-Border Merger.
Finalize and communicate organizational structure
Coordinate closing process for August 2024
Establish initial treasury linkage to Acquirer
- Weekly cash forecast process established
- Weekly conference call re: cash position set up
- Presentation by NT on capabilities to replace lock box
Develop Tax Efficient Global Reorganization of Acquirer
- Develop preliminary schematics illustrating proposed reorganization
- Present preliminary schematic plan proposal to upper management ...
Finance & Accounting 90-Day Acquisition Integration Plan
Finance & Accounting 90-Day Acquisition Integration Plan that incudes 93 tasks grouped in the following categories: Budget and Forecast, Insurance Coverage, Limits of Authority, Insurance Policies, Reporting Process, Purchase Price Accounting, and External and Internal Audits.
Sub-Work Stream Budget and Finance
|To obtain Acquired Co. FY25 budget for incorporating into NewCo budget - communicate with Acquired Co. entities/agree on deliverable format|
|To discuss/align on deliverables - Budgets in systems|
|Prepare NewCo budget - high level P&L for Day 30|
|Prepare NewCo budget - detailed level P&L, BS and CF for Day 60|
|Make adjustments for synergies / disynergies ...|
Post Merger Integration Finance Checklist
Over 110 finance integration tasks grouped in the areas of synergy tracking, chart of accounts, cash management, accounting policy variances, accounts payable, and accounts receivable.
- Determine synergy tracking approach. Decide on system and method.
- Identify team members and responsibilities.
- Create detailed implementation plans
- Create synergy tracking model templates
- Develop ongoing status reporting format and timing...
Acquisition Integration Finance Checklist
Newco - Finance Organization
- Schedule a work session with key stakeholders to assess functional redundancies and begin construct of attrition plan
- Build roles/responsibility matrix
- Construct a draft organization chart
- Conduct follow up meeting with key stakeholders to review draft and gather edits
- Schedule and conduct presentation meeting with decision making executives to present organization chart and gather further edits
- Revise new org chart
- Construct memo with HR to have an executive publish new org chart
- Schedule a department meeting to introduce new org chart/ R&R for review
- File new org chart into corporate archives and policy records
Acquisition Integration Accounting Checklist
Acquisition Integration Accounting Checklist covers 88 integration tasks in areas such as treasury, synergy tracking, organization design, taxes, operational reporting, and financial close.
|Implement plan for inter-company sweep and settlement to acquiring company's lockboxes / GL|
|Lockbox implementation / closures|
|Move accounts to same cash management platform|
|Close Acquired Company's bank accounts|
|Adjust for Target once final structure determined ...|
Finance M&A Due Diligence Checklist
- Cash flow forecast for the next six months
- Trend line of work capital for the past year, changes relative to total sales
- Working capital by segment, product line, and customer
- Historical and projected capital expenditure requirements
- Budget projections or business plans for the Business and the Target
- Capitalized a disproportionate amount of expenses
- Any material changes in the financial position of the Business and the Target
- Past budgets and projections with actual experience in order to assess the accuracy of management estimates
- Copies of federal tax returns for the last three years
- Copies of letters to the Target's auditors with respect to current, pending or threatened lawsuits or Target's delayed expenses ...
Payroll Merger & Acquisition Checklist
|Payroll Disbursement Bank Accounts|
|Coordinate with HR to identify payroll strategy for each country (e.g. Firm A payroll, outsource payroll vendors beginning Day 1)
|Coordinate with Legal and HR to identify where payroll disbursement accounts will be needed by country
|Create plan in conjunction with Treasury to open any new payroll disbursement accounts by Day 1 in conjunction with legal entity strategy and setup
|Identify all Firm B payroll disbursement accounts by country
|Create plan to close Firm B payroll disbursement accounts or transfer to Firm A legal entities and change bank signatory names by Day 1
|Payroll and Expense Disbursements ...|
Financial Due Diligence Request List
Excerpt from 4-Page Financial Due Diligence Request List:
- Quarterly income statement for most recent two quarters
- Financial projection for next four quarters
- Amount of forecast guaranteed by contract
- Most recent business plans
- A copy of tax returns for the last four years
- All tax distributions made
- Past two years’ audit results
- Last four years of financial statements
- Detailed analysis of each balance sheet account
- Debt instruments, indentures, loan agreements and agreements on documents relating to lines of credit ...
Synergy Best Practices and Tools
Synergy Tracking Tool
Comprehensive synergy tool template in Excel that includes 29 columns to track all dimensions of synergies.
Headings of 29 Columns in Synergy Report Excel Template
- Synergy Initiative #
- Function - Business/Product Line - Sub-function
- Workstream Ref #
- Description of Synergy Opportunity
- Date Original Input
- Date Updated
- Eliminate Redundancy …
M&A Synergy Best Practices
M&A realization best practice tips
- Assign synergies to accountable owners and then hold them to a plan
- Follow up on agreements on planned measurement approaches and their timing
- Ensure initiatives are supported and linked to integration related projects
- Manage cross-functionally to ensure costs are not simply shifted to other parts of the business …
Cost Synergies M&A Report
M&A Cost Synergies Excel Template plus Example of Completed Template
Instructions for Cost Synergy Template
1) Log each integration activity that increases or decreases headcount and/or expenses with projected time frames.
2) Use "Assumptions and Notes" to describe each integration activity in more detail.
3) Notes regarding general accounting treatment:
- Severance for reductions in Acquiree positions are generally capitalized as part of the purchase price (if the reduction is made within one year).
- Severance for reductions in Acquirer positions are expensed when employees are notified.
- Stay bonuses are expensed over the period teammate is required to work.
- Costs related to Acquiree facilities that will no longer be utilized are generally capitalized as part of the purchase price (if the move is made within one year).
- Costs related to Acquirer facilities are expensed.
- Potential sub-lease income offsets costs recorded ...
M&A Synergy and Cost Estimates
Excel spreadsheet to track synergy estimates categorized as labor and non-labor, required and discretionary (strategic vs. nonstrategic).
M&A Due Diligence: 30 Common Red Flags
- Does the company appear to manipulate reserve accounts in order to smooth or enhance its reported earnings?
- Is the internal audit team subjected to significant scope restrictions?
- Are a large proportion of monthly sales completed during the last few days of each month?
- Are any employees of such importance that their departure for any reason would jeopardize the existence of the business?
- Is there evidence of continual changes in accounting methods?
Finance/Tax/Treasury M&A Integration Team
PowerPoint presentation covering the schedule for implementation, non-negotiables, synergies, issues and assumptions, organization changes, and open issues for the cross-border integration in the Americas and EMEA.