The fastest way to lose buyer interest? Sloppy books. Here’s how to prepare your financials so they stand up to scrutiny and speed up the deal process.

Financial statements are the foundation of any M&A deal. For small private businesses, buyer skepticism often starts here — not because of fraud, but because many owners run personal expenses through the business or don’t maintain consistent accounting practices. The fix? Present clean, credible, and transparent numbers from the outset.

At a minimum, prepare three full years of financial statements and tax returns. Use accrual accounting rather than cash accounting if possible, as it gives a clearer picture of ongoing operations. If you’ve been expensing items like your car, cell phone, or personal travel, work with your accountant to prepare normalized financials that show what the numbers look like without those adjustments.

Buyers will also want to see monthly P&L statements, aged accounts receivable/payable reports, sales breakdowns by product or customer, and an inventory report. Consistency between tax filings and internal financials builds trust. Consider having a CPA conduct a Quality of Earnings (QoE) review — it’s a mini-audit that validates EBITDA and adds credibility during negotiations.

Accurate, transparent, and professionally presented financials speed up due diligence, reduce buyer skepticism, and help maintain your asking price.  Feel free to reach out anytime if you’d like to learn more.