What is meant by director drawings?
Director drawings refers to money taken out of the company by directors which is not done via a payroll or as dividends.
Why is it important to understand director drawings in a transaction context?
A potential buyer of your business will want to understand the actual outgoings of your company and what these would be were they to own the business. It is therefore important you are able to show documentation of any money you have taken out of the company as drawings to allow a potential buyer to appraise whether they need to adjust your financial results to account for these drawings being lower or higher than would be the case under their ownership.