2020 27-inch iMac Intel Core i7 with Mac Os Big Sur 11.6 that needs a factory reset

I am in possession of a 2020 27-inch iMac Intel Core i7 with Mac Os Big Sur 11.6 that needs a factory reset. I purchased it at a pretty good discount from a friend of the family who decided that he didn't like the Mac platform. Since I was looking to buy a new computer anyway, I was only too happy to take it off his hands to replace my 2017 21.5 inch iMac. The thing is, after reading quite extensively about how to reset a computer I do have questions, my first being do I do a reset while the mac's OS is Big Sur or - since I do want to then upgrade to Monterey - or do I do an upgrade to Monterey first and then do a factory reset?

I've read that doing a reset under Monterey is way easier than under Big Sur. I'd appreciate all and any thoughts on which way to proceed. By the way, since there's nothing of on the computer to save so I don't see

the need to do a backup of anything - or am I wrong?