I love a good Quality of Earnings

We’re increasingly recommending to owners who are on the fence about selling to take a few months to clean up financials while they’re mulling it over.

Even without glaring red flags, there’s a benefit to this when we go to market and can move faster, with more buyer trust.

I like to address it one step at a time:

1) QOE-lite focused on rev recognition, accruals, inventory, and add-backs for 12-24 months

2) #1 often leads to clean up of prior years

3) #2 often leads to expanding their existing bookkeeper’s scope or hiring a new firm to handle the day to day bookkeeping

Even without a transaction, the business is in a better place than it started.

Most don’t pull the trigger immediately so if you’ve got the time, clean it up!