The range on this service is wider than on almost anything else in professional services, and most of the spread has nothing to do with the analysis. It is a function of who signs the report and how much of the underlying financial work has to be redone before the analysis can start.
The market range
Quality of earnings engagements at the large accounting firms typically start around $20,000 and run well past $100,000 on mid-market deals. Independent transaction advisory boutiques generally sit between $15,000 and $50,000.
Our engagements start at $1,750 and report in 15 business days. That number surprises people, so it is worth being specific about what it is and what it is not.
| Tier | Scope | Typical use |
|---|---|---|
| Readiness review, from $1,750 | Normalisation walk-through, obvious adjustments identified, the issues a buyer will raise, no full report | 2 years before a sale, or before appointing an advisor |
| Sell-side report, from $4,500 | 36 months plus LTM, normalised EBITDA with each adjustment evidenced, working capital, net debt, written report | Given to a buyer at the start of a process |
| Buy-side report, from $7,500 | The above run on a target, with data-room review, management questions and a findings memo | Under exclusivity, before you commit capital |
What actually drives the fee
- The state of the ledger. The single largest factor. If monthly accounts do not exist, or exist and do not agree with each other, that has to be resolved before any normalisation is possible. This is where large-firm fees go.
- Period and entity count. 36 months across one entity is a different exercise from 36 months across four, in 2 currencies.
- Revenue complexity. Subscription, usage-based, milestone or percentage-of-completion revenue each require a recognition review that a simple transactional business does not.
- Whether a name is required. Some buyers, and most institutional lenders, will only accept a report from a firm on their approved list. That is a legitimate requirement and it prices accordingly. We will tell you when you are in that situation.
Most of a large-firm quality of earnings fee is bookkeeping archaeology. Fix that first and the analysis gets cheaper everywhere.
Sell-side, and why it pays for itself
A sell-side quality of earnings is not a document for the buyer’s benefit. It is a rehearsal. Every adjustment you find and evidence yourself is one the buyer cannot use to reopen price under exclusivity, which is the point at which you have the least leverage you will ever have.
The arithmetic is uncomfortable but simple. On a business valued at a 5x multiple, a single $80,000 adjustment found late costs $400,000 of enterprise value. A readiness review costs less than the first price chip on almost any deal.
What is in the report
- A normalised EBITDA bridge from reported profit to sustainable earnings, with a source document behind every adjustment rather than a description of one.
- Revenue quality: concentration, contract length, churn, cut-off, and whether growth came from price, volume or one customer.
- A normalised working capital level by month, which is the most disputed number in most transactions.
- Net debt and debt-like items: deferred revenue, accrued bonuses, unfunded leave, capex commitments, tax exposures.
What we are not
We are not a licensed CPA firm and we do not audit. A quality of earnings report expresses no opinion on whether the accounts are correct, and it is not an assurance product. If your counterparty requires an audit or an attestation, that is a different engagement with a different firm, and we will say so on the first call.
Before you get quotes
Ask each provider one question: what do you assume about the state of our monthly accounts, and what happens to the fee if that assumption is wrong? The firms that answer precisely are the ones whose quote will survive contact with your ledger.