• Alex Cook, M&A Integration Partners

3 Key Post Merger Integration Priorities for Finance

Updated: Sep 11, 2020

Post-merger integration planning and execution impacts everyone in the newly combined business. Finance teams in particular face a challenging environment during post merger integrations – with calls from the business for numbers, complex business critical systems to integrate and business as usual to maintain all competing for management attention.

With so much to be done and limited resources available the finance function faces critical choices. In our experience there are three critical priorities to address ahead of anything else

  • Re-establishment of the monthly close out and reporting cycle

  • Review and establishment of robust financial controls and

  • Build a Plan to get to one system of record for GL transactions

Re-establish Monthly Performance, Forecasting and Planning Cadence

For the Finance team confidence in “the numbers” is paramount through the post M&A period. Finance brings unique insights into the business performance during this period requiring the monthly cadence of monthly period close and subsequent reporting, forecasting and planning to be re-established as quickly as possible. Accurate and timely sharing of current and forecast business performance ensures that the integration is on track and expected benefits are delivered as expected and on time. Finance are well placed to detect if the program is running off track so prompt corrective actions can be taken.

Post M&A synergies will be many and need to be distilled into a set of measures that can be clearly communicated and understood. To be effective they include

  • Definitions of those measures and a documented process to generate them on a monthly basis

  • Baselining so that any movements in the measures can be accurately detected

  • An agreed format and cadence for management review

Review Financial Controls

Periods of major change are periods of elevated financial risk as staff exits lead to knowledge lost, low staff morale can lead to reduced compliance and poor communication can result in a simple lack of understanding of what do I do? From day one all staff need to understand

  • The end to end buying process

  • Who has access to and operates the bank accounts

  • Entity signatories

  • Approval limits for payments, supplier contracts, purchases, customer refunds, pay rises, etc to name a few

A detailed end to end review and mapping of key financial processes identifies areas where controls may need to be improved. Where these require a technology fix these should be incorporated into the plan for one system of record.

Start Moving to One System of Record

The ERP can be considered the core and source of truth for financial information in a business. Finance systems architecture is complex and integrating acquired platforms will be complex and require re-work until the business operates on one consolidated instance of an ERP. The rapid move to a single system of record also brings productivity improvements, reduced licensing costs and speeds reporting, planning and budgeting processes.

A plan to consolidate ERPs and deliver one system of record should consider:

  • An end to end audit of current finance, billing, procurement, payroll, collections and satellite systems including the nature and timing of data feeds and other interdependencies

  • Agreements for pending upgrades, license renewals or support agreement renewals

  • The desired future state finance systems map and the path to get there

We have found that the best approach should prioritise consolidation of systems starting at the core GL and working out to peripheral systems such as payroll, procurement, travel, billing and receivables.

With these three priorities addressed the finance team will have control of both the numbers and their operating environment allowing management to focus on what matters – delivery of the integration.

About M&A Integration Partners

Considering a merger or acquisition. M&A Integration Partners specialise in leading and supporting the execution of our client's post-merger integration programs. We reduce their risk of M&A failure, enable synergies, and minimise business disruption.

Typically, we work with mid-market clients who do not have an internal candidate who is available, or capable, of leading a merger integration program, or if clients require specialist integration support.

Our Integration Leaders and/or Specialists work in our client’s business to:

  • Provide pre-transaction support to help Discovery Teams clarify integration risks, opportunities, and mitigations

  • Assemble the Integration Team

  • Design and build the Integration Roadmap and 100 Day Plan

  • Lead the integration and mitigate execution risks

  • Identify new synergies to enhance the original business case

  • Measure outcomes and update executive sponsors

Our Integration Leaders are experienced senior business leaders with a real-world understanding of the challenges of mergers and acquisitions, specifically post-merger integration. Our Integration Specialists provide functional and technical support when needed.

We provide real-world experience from leading and supporting many merger integrations across media, telco, transport and logistics, manufacturing, technology, business supplies, business services, banking, finance, and professional services.

Please contact M&A Integration Partners to discuss how we can support your M&A activity.

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