Choosing the Right QofE Provider - A Sell-Side Selection Guide

The call came three weeks into due diligence. A buyer’s forensic accountants had found $400,000 in revenue that didn’t meet their recognition standards, and suddenly a $12 million deal was being repriced to $10.2 million. The $400,000 adjustment, combined with buyer concerns about revenue quality processes, led to both an earnings reduction and a compressed multiple as the buyer lost confidence in financial controls. The seller, a manufacturing company owner who’d spent two years preparing for this moment, had no ammunition to push back. He’d never seen the issue coming because he’d never looked at his own books through a buyer’s eyes. A well-executed sell-side quality of earnings engagement would likely have identified this revenue recognition issue during the revenue quality review phase, providing months to address it before buyer diligence began.

Executive Summary

A sell-side quality of earnings (QofE) report represents a strategically valuable investment for many business owners preparing to enter the M&A market. This financial analysis, conducted by an independent accounting firm on behalf of the seller, examines the sustainability and accuracy of earnings before a buyer ever sees the books.

This guide addresses sell-side QofE strategy for US-based business owners in the $2-20M revenue range selling to strategic or financial buyers. The guidance assumes manufacturing, services, or distribution businesses, though the core principles apply broadly. Highly specialized industries (healthcare, regulated sectors) may involve additional QofE considerations beyond this scope.

For business owners in this revenue range, a sell-side QofE typically costs between $25,000 and $75,000 based on our experience across more than fifty middle-market transactions over the past decade, with variation by complexity and provider positioning. Industry participants report similar ranges, though pricing data remains largely proprietary. The return on this investment can manifest in multiple ways: by pre-identifying and addressing issues, sellers can reduce the scope of buyer diligence questions, potentially shortening the diligence phase. Pre-documented responses to buyer challenges strengthen negotiating positions. And buyer confidence in validated financial representations can support valuation outcomes, though the relationship between QofE and final pricing is more complex than simple cause-and-effect.

This article provides a structured framework for selecting the right QofE provider, managing the engagement effectively, and using the resulting report to strengthen your transaction positioning. Whether you’re twelve months from market or ready to launch a process next quarter, understanding the sell-side QofE landscape positions you to make informed decisions that protect value and accelerate outcomes.

Introduction

Buyer-commissioned quality of earnings reviews have become standard practice in middle-market M&A transactions valued above $5 million. While industry statistics remain limited, experienced M&A practitioners report that buyer QofE is now expected in the vast majority of these transactions, particularly those involving private equity buyers or sophisticated strategic acquirers. Sell-side QofE engagements have become increasingly common among prepared sellers in recent years, particularly for transactions above $10M and in industries with complex revenue recognition, though their adoption varies by industry and transaction size. What’s changed is the recognition that the party with superior information holds the advantage in any negotiation.

The logic is straightforward. When a buyer’s QofE uncovers adjustments that reduce EBITDA, the seller is immediately on defense, explaining, justifying, and often conceding value. When the seller has already identified these adjustments, documented the explanations, and in many cases corrected the underlying issues, the dynamic often improves for sellers.

A sell-side quality of earnings report serves multiple strategic functions. It operates as a diagnostic tool, revealing issues while there’s still time to address them. It functions as a credibility signal, demonstrating to buyers that the seller is prepared and transparent. It provides a negotiating asset, offering pre-documented responses to buyer challenges. And it creates transaction efficiency, reducing the time and cost of buyer due diligence by providing a foundation for their analysis.

But a critical distinction bears emphasis: a sell-side QofE identifies financial reporting issues and earnings quality concerns, but it’s not comprehensive buyer diligence. Buyers also conduct operational due diligence, customer interviews, supply chain assessment, and legal review. QofE reduces financial surprises, but not all buyer concerns originate in financial analysis. Prepare for the full scope of buyer investigation, not just the financial dimension. Sellers who invest in QofE expecting it to prevent all diligence surprises will be disappointed when buyers raise operational, customer, or strategic concerns beyond financial analysis.

Not all QofE providers deliver equal value. The accounting firm you select, the scope you define, and the way you manage the engagement all influence the report’s effectiveness. A poorly executed sell-side QofE can actually damage your position, either by missing issues that buyers later find or by creating a document that raises more questions than it answers.

This guide equips you to make informed decisions at each stage: selecting the right provider, structuring the engagement, and deploying the report strategically throughout your transaction.

Understanding What a Sell-Side QofE Actually Analyzes

Before evaluating providers, it’s important to understand what a quality of earnings report examines. Despite the name, QofE analysis extends well beyond income statement review.

A QofE typically covers six core areas:

Earnings Sustainability Analysis examines whether reported EBITDA reflects ongoing, repeatable performance. This includes identifying one-time revenues or expenses, separating owner-specific costs from true operating expenses, analyzing customer concentration trends, and evaluating revenue recognition practices.

Working Capital Assessment determines the normalized level of working capital required to operate the business. Understanding normalized working capital directly affects the working capital target and adjustment mechanisms in purchase agreements, particularly the peg (baseline) and collar (adjustment triggers) on post-closing settlements. Under typical purchase agreement structures, at closing, if actual working capital differs from the target, one party owes the other the difference. Sellers who haven’t modeled normalized working capital often set targets that are too low, creating post-close payments. Others fail to account for seasonal fluctuations, leading to disputes about whether closing-date working capital is normal or artificially inflated.

Revenue Quality Review looks beyond total revenue to examine sustainability, concentration, contractual protections, and growth trajectory. Buyers pay premium multiples for recurring revenue, contractually protected revenue, and diversified customer bases.

Expense Normalization identifies costs that won’t continue post-transaction. Owner compensation above market rates, family member salaries for minimal work, personal expenses run through the business, and one-time professional fees all represent potential EBITDA adjustments.

Balance Sheet Analysis examines asset values, liability completeness, and off-balance-sheet obligations. Aged receivables, obsolete inventory, and unrecorded liabilities all affect transaction value.

Financial Reporting Quality assesses the reliability of the company’s financial systems, the consistency of accounting policies, and the quality of supporting documentation.

Understanding these components helps you evaluate whether a potential QofE provider has the expertise to deliver a genuinely useful report.

Provider Selection Criteria That Actually Matter

Selecting a sell-side QofE provider requires evaluating candidates across multiple dimensions. The right choice depends on your specific situation, but certain criteria apply universally.

Transaction Experience in Your Size Range

The middle market spans a wide range, and experience at one end doesn’t translate to the other. A firm that primarily serves $100 million transactions may over-engineer a $5 million deal, while one focused on smaller engagements may lack sophistication for a $15 million process.

Ask potential providers specifically about their experience in your revenue range. Request references from transactions similar to yours in size and complexity. The best providers will readily share case studies demonstrating relevant experience.

Industry Knowledge

Industry expertise matters more than many sellers realize. A QofE provider unfamiliar with your industry’s revenue recognition patterns, typical working capital cycles, and common adjustment items will produce a less useful report. They may miss industry-specific issues that experienced buyers will identify, or flag items as concerns that are actually standard practice.

For a manufacturing company, you want a provider who understands percentage-of-completion accounting, inventory valuation complexities, and equipment lifecycle issues. For a SaaS business, you need someone fluent in ARR, churn analysis, and deferred revenue treatment. For a professional services firm, revenue recognition timing and project profitability analysis require specialized understanding.

To verify industry knowledge, request recent sample reports on companies in your specific segment. Look for evidence that the provider has grappled with the key accounting issues in your industry. Ask specifically: “How many engagements in my industry have you completed in the last 18 months? What were the typical adjustment categories in those companies?” Specific examples demonstrate genuine expertise.

Independence and Credibility

Your sell-side QofE is only valuable if buyers view it as credible context for their own analysis. This requires a provider with genuine independence and market reputation.

National and large regional accounting firms carry inherent credibility, but often price themselves out of smaller middle-market engagements. Specialized transaction advisory firms can deliver excellent value, but their reputation among buyers matters enormously. Ask investment bankers and M&A attorneys which QofE providers they see generating buyer confidence.

Your QofE provider should have no existing relationship with your company. Using your current outside accounting firm for sell-side QofE creates an obvious conflict, they’ve been blessing your financials for years and have limited incentive to identify issues.

A sell-side QofE signals transparency and preparedness, but it doesn’t eliminate buyer-side diligence. Buyers will still conduct their own quality of earnings review, and will treat your sell-side analysis as useful context rather than authoritative validation. Some buyers remain skeptical of seller-commissioned analysis, viewing it as potentially biased toward favorable conclusions. To maximize credibility, emphasize the independence of your chosen provider and your objective of identifying issues early rather than presenting a pre-packaged narrative. The value of sell-side QofE is that you’ve already engaged in the analysis and addressed issues on your terms, not that it substitutes for buyer analysis.

Scope and Deliverable Quality

Request sample reports from potential providers. Evaluate them for clarity, thoroughness, and usefulness. A quality sell-side QofE should:

• Present findings in a format easily digestible by buyers and their advisors
• Provide clear explanations for all proposed adjustments
• Include supporting schedules and documentation references
• Address working capital normalization thoroughly
• Identify potential buyer concerns proactively

Some providers deliver impressive-looking reports that lack analytical depth. Others produce thorough analysis buried in impenetrable prose. The best providers combine rigorous analysis with clear, professional presentation.

Team Composition and Availability

Understanding who will actually perform the work matters as much as the firm’s reputation. In many accounting firms, partners sell engagements that staff execute. Make sure you know who will lead your project, their specific experience, and their availability during your timeline.

A senior manager with ten years of transaction experience often delivers more value than a partner who delegates immediately. Ask to meet the actual engagement team, not just the selling partner. This works best if your provider has significant buyer-side due diligence experience. When evaluating providers, ask: “As your team conducts buyer due diligence, what adjustment categories do buyers most frequently challenge in companies like ours?” Their answer reveals whether they have pattern recognition about buyer behavior.

Pricing Structure and Transparency

Sell-side QofE fees in the middle market typically range from $25,000 to $75,000 based on our experience across more than fifty transactions, with variations based on company complexity, transaction size, and provider positioning. Complexity drivers include:

• Number of business entities and locations
• Revenue stream diversity and recognition complexity
• Quality of existing financial documentation
• Transaction timeline pressures
• Scope of analysis required

Quality providers offer transparent pricing with clear scope definitions. Be wary of firms that quote at the low end without fully understanding your situation, scope creep and change orders often follow.

Consider the investment ROI carefully, while acknowledging uncertainty in outcomes. A sell-side QofE typically represents a small percentage of deal value for larger transactions. For a $10M company selling at 5x EBITDA ($50M valuation), a $50k QofE represents 0.1% of deal value. But for bootstrapped founders or owners pursuing sub-$10M exits, this is meaningful cash outlay. If the QofE prevents even 0.5% of value loss through pre-identified issues and buyer confidence, the return ($250k in that example) significantly exceeds the investment.

But this return isn’t guaranteed. The value depends on whether the QofE identifies material issues that would otherwise surface during buyer diligence and reduce value. For companies with straightforward financials, the return may be limited to buyer confidence signaling rather than direct value protection. Based on our experience, roughly 60-70% of QofE engagements identify material issues that justify the investment, while 30-40% of well-managed businesses with clean financials see more modest direct returns.

When Sell-Side QofE Makes Sense and When It Doesn’t

For many business owners, a sell-side QofE represents a high-value investment in transaction preparation. It’s particularly valuable when:

• Financial statements are complex with multiple revenue streams or entities
• Adjustments are material and likely to be contested by buyers
• Buyer diligence timeline is expected to be compressed
• You want maximum defensibility of financial representations
• Customer concentration or revenue recognition issues may raise buyer concerns

But not every transaction benefits equally from this engagement. For very small deals (sub-$2M), the QofE cost as a percentage of deal value becomes prohibitive. For deals where the buyer is purchasing at an earnings multiple with a full post-close adjustment mechanism, a QofE may provide limited additional value. For founders who have been consistently transparent about financial issues with clear documentation, a QofE may offer limited marginal insight.

Alternatives to Full Sell-Side QofE

Full sell-side QofE is the most complete approach, but may not be optimal for all sellers. Understanding the alternatives helps you make an informed choice:

Internal Financial Review with Your Existing Accountant ($5,000-$15,000): For companies with straightforward financials and strong existing documentation, your current accounting firm can conduct a focused review of likely adjustment areas. This costs 70-80% less than full QofE but lacks the buyer credibility of independent analysis. Best suited for: simple businesses with minimal expected adjustments and tight budgets.

Focused Working Capital Analysis ($10,000-$25,000): If your primary concern is working capital peg negotiations rather than complete EBITDA adjustments, a targeted working capital analysis may suffice. This examines seasonality, normalization, and target-setting without full earnings quality review. Best suited for: straightforward businesses where working capital is the primary financial negotiation point.

Full Sell-Side QofE ($25,000-$75,000): Provides maximum buyer credibility, complete issue identification, and strongest negotiating position. Best suited for: complex financials, material expected adjustments, sophisticated buyer pool, or situations where seller credibility is a concern.

The tradeoff matrix looks like this:

For most sellers in the $5-20M revenue range with complex financials, full QofE remains the strongest choice. But acknowledge the alternatives before committing $50,000 or more.

Managing the Engagement for Maximum Value

Selecting the right provider is only the first step. How you manage the engagement significantly influences the report’s value.

Timing Considerations

Generally, you want the QofE completed two to four months before buyer marketing begins, analyzing the most recent complete fiscal year of financial statements. But this timeline assumes several conditions:

• Well-organized financial records with accessible documentation
• Responsive management available for information requests
• No major issues requiring extended investigation or remediation

Build in contingency: plan to start four to five months before your target marketing date to accommodate delays in document retrieval, investigation of identified issues, and other transaction preparation activities. If records are disorganized or significant issues emerge during the analysis, extend this timeline by 6-8 weeks.

If you’re currently early in planning (12+ months before expected market date), starting the QofE too early means the analysis may feel dated to buyers; starting too late compresses your ability to address issues the report identifies.

Consider your fiscal year-end date carefully. For example: If your fiscal year ends June 30 and you plan to market in April of the following year, consider starting your QofE in September (with June-ending statements) or November (with August interim financials). This provides two to four months to address identified issues before buyer diligence begins.

Your sell-side QofE is a snapshot at a point in time. If significant time passes between report completion and buyer diligence, be prepared to update key findings (especially revenue concentration, major customer status, or expense normalization) for buyer discussion. A report that was accurate when completed but is now stale looks problematic. Plan for QofE updates if your transaction timeline extends beyond 12 months from report date.

Preparation That Accelerates the Process

Your QofE engagement will proceed more efficiently and cost less if you prepare thoroughly. Before the engagement begins:

Organize financial records systematically. The provider will request bank statements, general ledger detail, customer contracts, vendor agreements, and supporting documentation for significant transactions. Having these organized and accessible reduces billable time spent on document retrieval.

Prepare your own adjustment schedule. You likely already know some items that will require normalization: owner compensation, family expenses, one-time costs. Documenting these proactively demonstrates sophistication and focuses the provider’s time on less obvious issues.

Brief your internal team. Your controller, bookkeeper, or CFO will field significant information requests. Make sure they understand the engagement’s purpose and importance, and clear their calendars for responsive cooperation. Plan for 20-40 hours of management time commitment during the engagement period, this indirect cost is real and should be factored into your decision.

Maintaining Productive Dialogue

The best sell-side QofE engagements involve ongoing dialogue between provider and client, but this dialogue must protect report integrity. You should:

Request regular status updates. Weekly calls during the analysis phase keep you informed of emerging issues and help the project stay on timeline.

Engage substantively with preliminary findings. You may have contextual information that changes interpretation. For example, if the provider flags a large one-time customer invoice, you might provide the customer contract showing this is a recurring annual event. But don’t push back to soften legitimate findings. If the provider identifies a revenue recognition issue, a working capital shortfall, or an expense that won’t recur post-transaction, arguing to exclude it from the report weakens the document with buyers.

Protect report integrity. Be aware of the incentive tension: your provider wants to retain your business, and you want findings that support your narrative. Never pressure your provider to soften legitimate findings. If you find yourself disagreeing with most of the provider’s conclusions, that’s a sign either the provider is wrong (lower probability) or you’ve selected the wrong advisor (higher probability). In either case, report integrity matters more than comfort. The goal is an accurate report, not simply one that tells you what you want to hear.

Addressing Issues the Report Identifies

A sell-side QofE that uncovers material problems before buyers find them is typically a successful engagement, you’ve gained time and control to address issues on your terms. But results vary significantly. For companies with straightforward financials, QofE may provide limited direct value beyond buyer confidence signaling.

For each significant finding, you have three practical options:

Fix it (where feasible and cost-effective). Some issues can be resolved before going to market: cleaning outdated inventory, documenting previously informal customer agreements, establishing new processes. But many issues resist fixes: revenue concentration can’t be retroactively diversified, historical transaction documentation can’t be fully reconstructed.

As you consider “fixing” issues, evaluate the cost against the benefit. Clearing $50k of obsolete inventory costs real cash (reducing near-term EBITDA). Documenting previously informal customer relationships might require legal review. Establishing new financial controls requires management time. Some “fixes” are cheaper than the EBITDA reduction they prevent; others are not. Model the cost of fixes before committing to them.

Explain it. Most issues can be contextualized through documentation and narrative. If your largest customer represents 35% of revenue but operates under a long-term contract with strong renewal history, prepare documentation that demonstrates relationship stability.

Price it. Acknowledge that some issues will legitimately affect valuation. Understanding this before marketing allows you to set appropriate expectations and avoid feeling ambushed during buyer diligence.

Not all QofE findings require fixing before marketing. Evaluate each finding against three criteria: Can it be fixed feasibly? Is the cost of fixing justified by the value improvement? Does the timeline permit fixing before marketing? Often, the answer is “explain it” or “price it.” Marketing while actively addressing some issues is standard practice; buyers expect some findings to require post-LOI investigation.

Using the Report in Your Transaction

A completed sell-side QofE becomes a strategic asset throughout your transaction. Deploying it effectively maximizes its value.

In Marketing Materials

Reference the sell-side QofE in your Confidential Information Memorandum. Many sophisticated buyers recognize this as a signal of preparedness and transparency. But some buyers remain skeptical of seller-commissioned analysis, viewing it as potentially biased. To maximize positive perception, emphasize the independence of your chosen provider and note that you’re commissioning the QofE to identify issues early, not to present a pre-spun narrative. You typically don’t share the full report at the marketing stage, but noting its existence creates positive expectations. Some sellers choose not to mention the QofE at marketing stage, preferring to present it during early diligence as a cooperative gesture that speeds the process.

In Management Presentations

When meeting with potential buyers, reference specific findings from your QofE analysis. This demonstrates your understanding of the business’s financial dynamics and your willingness to engage transparently. Buyers typically interpret this as reduced diligence risk.

During Letter of Intent Negotiations

The sell-side QofE gives you credibility when negotiating LOI terms. When your adjusted EBITDA is supported by independent analysis, buyers have less room to argue for lower valuations based on speculative adjustments.

Consider requesting that buyers review your sell-side QofE before finalizing LOI terms, but only if it supports your narrative. If the QofE identified material issues that you’ve since addressed, share that context. If significant issues remain unresolved, you may prefer to share selectively during diligence rather than before LOI. This can reduce post-LOI retrading by establishing financial expectations before exclusivity begins, but only when the report strengthens rather than undermines your position.

In Due Diligence

When buyer diligence begins, provide your sell-side QofE as a foundational document. Quality reports can accelerate the buyer’s process by demonstrating that sophisticated analysis has already occurred.

Monitor buyer reactions to your QofE findings. Where they accept your adjustments, no further work is needed. Where they disagree, you have pre-prepared responses ready. This focused approach is far more efficient than responding to a blank-slate buyer analysis.

While sell-side QofE provides valuable preparation, buyers maintain significant control through their own independent analysis. Buyer QofE providers may reach different conclusions, identify additional issues, or apply different accounting interpretations. The benefit is typically better preparation for negotiations rather than elimination of buyer adjustments.

In Purchase Agreement Negotiations

Working capital targets, earnout structures, and representation language all benefit from sell-side QofE analysis. Your documented understanding of normalized working capital strengthens your negotiating position on peg and collar provisions. Your identified adjustments provide support for earnout baseline calculations.

Understanding What QofE Can and Cannot Accomplish

A well-executed sell-side QofE typically improves transaction preparation and can support better negotiating outcomes. By validating your financial representations, it increases buyer confidence in fair valuation, potentially reducing the discount buyers might otherwise apply for perceived information risk. By pre-identifying issues, it prevents buyer surprises that typically trigger price reductions or deal structure changes.

But QofE doesn’t guarantee higher prices, it improves preparation and may support valuation outcomes. If the QofE uncovers substantial problems, this may result in lower valuations than the seller initially expected. The value isn’t guaranteed higher prices, but rather more predictable pricing based on accurate information. Sellers who understand their true financial position can set realistic expectations and avoid the emotional whiplash of discovering problems during buyer diligence.

It’s also important to recognize the limits of QofE analysis. A QofE identifies financial reporting issues and earnings quality concerns that are visible in your financial records and documentation. It does not protect against:

• Operational issues discovered through buyer site visits
• Customer feedback obtained through buyer reference calls
• Supply chain vulnerabilities revealed through vendor analysis
• Legal issues uncovered in legal due diligence
• Technology limitations discovered in technical assessment

Prepare for the full scope of buyer investigation, not just the financial dimension. A seller who invests in QofE believing it prevents all diligence surprises will be disappointed when buyers raise operational or strategic concerns beyond the financial analysis.

Failure Modes to Anticipate

QofE engagements carry risks that sellers should understand before committing:

Discovery of major issues requiring transaction delay (20-30% probability based on our experience). Material EBITDA adjustments, control deficiencies, or customer concentration issues may require 3-6 months to address, delaying your marketing timeline and incurring additional costs. Mitigation: engage early enough to allow time for remediation.

Limited return on investment for clean companies (30-40% probability). If your financials are straightforward with minimal adjustments, the $50k cost may yield limited direct value beyond buyer confidence signaling. Mitigation: consider alternatives like focused working capital analysis for simpler situations.

Buyer skepticism of seller-commissioned analysis (15-25% probability depending on provider choice). Some buyers view seller QofE as potentially biased, conducting equally extensive diligence regardless. Mitigation: choose a credible, independent provider and emphasize objectivity over advocacy.

Understanding these failure modes helps you set realistic expectations and make informed decisions about whether QofE is right for your situation.

Actionable Takeaways

Selecting and managing a sell-side quality of earnings engagement requires systematic attention to several key elements:

Start with clear objectives. Before evaluating providers, understand what you need the QofE to accomplish. Are you primarily concerned with validating your EBITDA adjustments? Understanding working capital? Identifying buyer concerns? Your objectives should shape provider selection and engagement scope.

Evaluate whether QofE is right for your situation. For most sellers in the $5-20M revenue range with complex financials, the investment is justified. For smaller deals or straightforward situations, alternatives like internal review or focused working capital analysis may be more appropriate. Consider the cost-benefit tradeoff explicitly.

Prioritize relevant experience. The right provider has meaningful transaction experience in your industry and size range. Request specific references and sample work product from comparable engagements. Verify industry expertise with specific questions about their recent work.

Invest in preparation. Organized documentation, clear internal communication, and proactive adjustment identification all reduce costs and improve outcomes. Build timeline contingency for the inevitable delays. Plan for 20-40 hours of management time commitment.

Maintain active engagement while protecting integrity. Provide context that improves accuracy, but never pressure providers to soften legitimate findings. The goal is an accurate report, not a favorable one.

Address findings strategically. Use the QofE’s issue identification as an opportunity to fix (where cost-effective), explain (with documentation), or price (with realistic expectations) each finding before buyers arrive.

Deploy the report deliberately. Your sell-side QofE supports multiple transaction stages. Plan specifically how you’ll use it in marketing, negotiation, diligence, and documentation, while recognizing that buyers will still conduct their own analysis and maintain independent control.

Prepare for unfavorable findings. A QofE that reveals problems is still valuable, better to know now than during buyer diligence. Set expectations accordingly before commissioning the engagement, and be psychologically prepared for the possibility of findings that change your timeline or valuation expectations.

Conclusion

A sell-side quality of earnings report represents far more than an accounting exercise. In the hands of a prepared seller, it becomes a strategic instrument that shapes transaction dynamics from first buyer contact through closing.

The investment, typically $25,000 to $75,000 for middle-market companies, requires careful consideration against the value at stake in a business sale. The return manifests not necessarily in higher prices, but in more predictable outcomes, reduced transaction stress, accelerated timelines, and negotiating confidence based on thorough preparation. For 60-70% of engagements, QofE identifies material issues that justify the investment; for the remainder, the return may be limited to buyer confidence signaling.

The sellers who achieve optimal outcomes approach QofE provider selection with the same rigor they bring to other critical business decisions. They evaluate providers against specific criteria, manage engagements actively while protecting report integrity, and deploy resulting reports strategically. They also recognize the limits of what QofE can accomplish, it’s one component of complete transaction preparation, not a guarantee against buyer concerns or a substitute for buyer-side analysis.

As you consider your own exit preparation, recognize that the quality of earnings analysis is often one of the first places buyers form impressions about seller preparedness. A well-executed sell-side QofE signals that you understand transaction dynamics, value transparency, and have prepared thoroughly for the process ahead. In a market where buyer confidence influences both valuation and deal certainty, that signal carries meaningful value, even as you maintain realistic expectations about what any single piece of transaction preparation can accomplish.