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Look Before Leaping Into an IPO

Avoid Groupon's mistakes when planning an IPO - get accounting practices in or

Business owners and corporate boards who have been considering putting their companies up for an initial public offering would do well to start acting like a publicly traded entity first, according to the Journal of Accountancy.

Launching an IPO is not a light undertaking. Even if the

Business owners and corporate boards who have been considering putting their companies up for an initial public offering would do well to start acting like a publicly traded entity first, according to the Journal of Accountancy.

Launching an IPO is not a light undertaking. Even if the recent market volatility has made the option less appealing, it could be easier to make the transition in a few quarters or years if the company starts preparing for the offering and follows some of the demands on a public company, the source notes.

Creating internal controls that comply with the Sarbanes-Oxley Act and other regulations, as well as creating a tax team that can oversee the transition from reporting as a private company to filing public financial records with the Securities and Exchange Commission, are some of the steps the Journal outlines. In addition to those steps "implement and practice a quarterly close process," "perfect the core tax provision model" and "align footnote disclosure with public company requirements."

As Groupon's recent troubles ahead of its IPO signify, being sure that all your internal accounting practices are above board is just one way to make going public a smoother process. The company has been valued much lower than it was a few months ago, when some were predicting valuations of up to $30 billion.  

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