Acquisition Integration Checklist

Request audited or reviewed statements for the last five fiscal years plus current-year stub period. Tie opening balances at acquisition date to the seller's last issued trial balance — diligence-era numbers and post-close balances often disagree by AJEs the seller booked late.

Walk the QofE add-backs (owner comp normalization, one-time legal, deferred revenue haircuts, working-capital pegs) into your opening balance sheet. Document which adjustments survived to the purchase agreement and which were diligence-only.

Calculate net working capital at close per the purchase-agreement definition. Compare to the peg; the delta drives the post-close true-up payment within the window specified (typically 60-90 days).

Record purchase-accounting AJEs: fair-value step-ups, identifiable intangibles (customer lists, trade name, non-compete), goodwill plug, and DTL on step-ups. ASC 805 measurement period is one year for refinements.

Pick one GL going forward — typically the acquirer's (Sage Intacct, NetSuite, or QBO Advanced). Running parallel ledgers past 90 days creates reconciliation debt that compounds at every close.

Build a row-by-row crosswalk from target GL accounts to parent accounts. Resist creating new accounts for tracking concerns — push location, department, and project differentiation into classes/dimensions/tags. A bloated COA is the most common consolidation pain.

Add the acquired entity as a class (QBO) or subsidiary/location (Intacct/NetSuite). Backfill historical transactions for the stub period so YTD reporting reconciles after migration.

Migrate the trailing 24 months of detail or summary journals depending on retention policy. Lock the legacy GL with a close-date password once tied; do not leave both systems open for entry.

Stock vs. asset purchase drives everything downstream: 338(h)(10) or 336(e) elections, basis step-up, NOL survival under §382, state-level conformity. Confirm with deal counsel before any return position is taken.

Pull last three years of 1120/1120-S/1065 plus state returns. Flag uncertain tax positions, NOL carryforwards, R&D credit balances, and any open IRS or state notices that survive in a stock deal.

Pull target's revenue and payroll by state for 24 months. Identify any state where economic-nexus thresholds (typically $100K or 200 transactions post-Wayfair) were crossed without registration. Voluntary disclosure agreements limit lookback if filed before the state finds you.

For each unregistered nexus state, file VDA before the state issues a nexus questionnaire. VDAs typically limit lookback to 3-4 years and waive penalties; getting found first means full lookback plus penalties and interest.

Stock purchases that close mid-year may trigger a short-period return for the target. Asset deals require allocation of purchase price on Form 8594 by both parties — mismatched 8594s draw IRS attention.

Sit with the target's controller and document the existing month-end close: bank rec timing, AP cutoff, accrual policy, who posts JEs, who reviews. Identify gaps before forcing the parent's calendar onto them.

Map controls over wires, JE posting, vendor master changes, and payroll. Small targets routinely fail SoD — one person enters the bill, approves it, and cuts the check. Document the gap and the compensating control until headcount supports separation.

For each material gap, document the target state, owner, and target date. If the parent files SOX or supports a SOC 1/2, gaps must close before the next assertion period.

Push the target onto the parent's WD+5 (or whatever cadence). First combined close usually slips — plan a soft close at month one and a hard close at month two with full review.

Pull employment agreements, change-of-control clauses, severance terms, and 401(k) plan documents. Identify any golden parachutes triggering §280G review and any plans that must be terminated or merged within a regulatory window.

Mid-year payroll cutovers create W-2 headaches — both predecessor and successor must report wages unless a successor-employer election (Rev. Proc. 2004-53 alternate procedure) is made. Plan the cut at year-end if at all possible.

Successor-employer rules vary by state. Some allow rate transfer (good if target has a low SUTA rate); some force a new account at the new-employer rate. File before the first combined pay run.

Send written notice covering health-plan changes, 401(k) blackout windows (ERISA requires 30-day advance notice for blackouts >3 days), PTO accrual policy, and pay-date changes. Hold open Q&A sessions; HR drives, accounting supports.

Confirm with deal counsel whether HSR was triggered (size-of-transaction and size-of-person tests). If so, the 30-day waiting period must have run before close — verify the filing receipt is in the deal binder.

Update Secretary of State registered agent, officers, and address records in every state of foreign qualification. Late updates can suspend good standing and block sales-tax registration changes.

Send the closing certificate and updated org chart to the lender. Recalculate fixed-charge coverage and leverage on a pro-forma basis; the first post-close compliance certificate is usually the trip wire.

Final review with the controller, tax lead, and HR. Confirm opening balance sheet is final, all required filings are in, and the target is fully on the parent's close cadence. Outstanding items move to a tracked punch list with owners and dates.