Client Profile

A 5-year-old, family-owned service business generating approximately $5.8 million in annual revenue. The owner had been managing the books internally using QuickBooks, without formal accounting support.

While their CPA had implemented a solid tax strategy — including accelerated depreciation — this created complications on the financing side. Tax returns showed significantly depreciated fixed assets, which distorted the company's true equipment value. Since QuickBooks closely mirrored the tax returns, it would have required extra clarification during the Quality of Earnings (QoE) process.

The owner had listed the business through a broker and was attracting interest from SBA-financed buyers — but the financials were raising concerns during diligence.

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The Challenge

Despite strong revenue, the financials raised several red flags:

• COGS and overhead were combined

• The balance sheet was unreconciled, with an inaccurate fixed asset schedule

• Payroll and owner distributions were inconsistently categorized

• No tracking of prepaid expenses like insurance

• Monthly performance trends were unclear to buyers

These issues triggered documentation requests and lender delays, putting the deal at risk.

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Our Solution

We stepped in behind the scenes — no audit required — and worked directly with the broker and seller to:

• Separate COGS from overhead and reclassify expenses

• Normalize and adjust EBITDA across 3 years

• Reconcile the balance sheet and fixed asset schedule

• Create monthly trend reports and adjust for prepaid items

• Deliver a lender-ready financial package with a summary dashboard

 

The Result

• The broker confidently re-listed the business

• The seller received an SBA-backed offer shortly after cleanup

• The lender noted the books were “better than most small business submissions”

• The QoE process went unusually smoothly, with minimal clarification needed

 

Pricing Options Offered

Option 1: Excel-Based Financial Package – $X,000 (5–10 business days)

• Balance sheet reconciliation

• P&L adjustments and summary dashboard (Excel only)

Option 2: QBO Clone Build – $X,000 (10–20 business days)

• Cloned QuickBooks file (no bank or payroll access)

• Rebuilt chart of accounts and historical entries

• GAAP-aligned financials + dashboard

This client selected Option 1.

 

Add-on Service: QoE Folder Preparation – Structured data room with all documents lenders and buyers typically request.

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Key Takeaway

Financial clarity builds confidence.
This cleanup helped the seller avoid valuation drops, improve buyer/lender transparency, and close the deal on strong terms.

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Note: This case study is a composite scenario based on typical engagements. Details have been modified to protect confidentiality while illustrating real outcomes.