If you’re thinking about selling your MSP one day, or even just want to build a stronger and more profitable company, basic bookkeeping isn’t ideal. Buyers want clarity. They want to know where your revenue comes from, how profitable each of your services are, and whether your cash flow is predictable. Messy or incomplete financials can hurt your valuation and even scare buyers away.
Think of your finances like a flywheel. Once you get it moving, momentum builds and everything starts working together to make your business stronger and more appealing to buyers. There are five core parts to focus on:
You can’t make good decisions with outdated or inaccurate numbers. Having access to clean, up-to-date financial data puts you in control to:
If clients are constantly paying late, you end up funding their operations instead of focusing on your own growth. But predictable cash flow isn’t just good for operations. It also makes your MSP more attractive to buyers since they want confidence that revenue comes in on time. If you’re thinking of selling your MSP in the future, you should implement clear and consistent billing practices. For example:
In a buyer’s eyes, not all revenue is equal. Software, hardware, projects, and managed services each have different margins. Most buyers hold recurring managed services revenue in the highest regard. If you lump everything into one bucket, you lose the ability to demonstrate to buyers which services are driving profit, and how much revenue is monthly recurring.
A structured chart of accounts helps you:
Closing your books on time every month builds credibility and eliminates surprises. A consistent monthly close process ensures your financials are accurate and ready when buyers or lenders ask for updates.
Best practices include:
Once your foundation is solid, you can shift from looking backward to planning ahead. Forecasting cash flow, revenue, and expenses gives you the confidence to make smarter growth decisions.
Forward-looking planning helps you:
When you put these five pieces together, your finance flywheel starts to gain momentum. Clean data leads to better decision making, which improves cash flow and profitability, which makes your MSP more attractive to buyers.
For MSP owners considering an exit, getting your financials in shape isn’t just about running a tight ship. It’s about creating a business that commands attention and earns top value when the time comes.
Want to dive deeper into these strategies? Watch our full webinar replay with the Finance Flywheel’s creator Paul McCann here: MSP Accounting: The Finance Flywheel
If you’re considering selling your MSP, we can help. From preparing your financials to positioning your business for maximum value, our team specializes in helping IT service providers navigate successful exits.
Contact us today to talk about your goals and find out how we can help you prepare for a profitable sale.