Three financial documents to gather before succession planning
The management accounts, asset register, and debt schedule every owner should assemble before a transition assessment.
Succession planning stalls when the paperwork is not ready. These three documents let us — and your accountant — have a productive first session.
1. Three years of management accounts
Not just tax returns. Management accounts show how the business actually performs month to month — including owner drawings, one-off expenses, and seasonal swings. A retail business that looks flat annually may be wildly profitable in December and loss-making in February. Successors and buyers need to see that pattern.
Ask your accountant for profit-and-loss statements and balance sheets by month for the past thirty-six months. PDF is fine.
2. Asset register with depreciation status
List every significant asset — vehicles, equipment, leasehold improvements, inventory systems — with purchase date, current book value, and whether it is owned outright or under finance. Buyers often underestimate replacement costs for ageing equipment. An earthmoving yard we advised discovered their two oldest excavators needed replacement within eighteen months of sale, which shifted the negotiation.
3. Debt and commitment schedule
Include bank loans, equipment finance, commercial leases, personal guarantees, and any vendor finance you already provide to customers. Also note informal commitments: the supplier you pay on extended terms, the staff member promised a bonus tied to tenure, the council permit renewal due next year.
What we do with them
During a Succession Readiness Assessment, we summarise financial readiness — not as a formal valuation, but as a picture of whether the business can support a transition without emergency refinancing. Gaps become line items on your 12-month action plan.
Gathering these documents takes most owners a week. Starting without them wastes the first session on admin instead of decisions.