M&A / QoE Prep (Pre-QoE Financial Readiness)
Pre-QoE financial prep is a separate discipline from Quality of Earnings itself. We prepare the ledger, add-back support, and reconciliations so the buyer's QoE runs faster, costs less, and finds fewer surprises.
Pre-QoE prep makes the buyer's Quality of Earnings cheaper, faster, and less contentious. We prepare; the CPA firm attests.
Every serious middle-market sale involves a Quality of Earnings analysis produced by an accounting firm — usually a Big Four or national CPA firm working for the buyer. That report becomes the working document for the deal, and its findings shape final purchase price, working capital peg, and escrow. Sellers who show up without pre-QoE preparation absorb whatever the buyer's team produces.
Vessel Advisors doesn't produce the QoE — that is the CPA firm's role, and a fractional CFO firm should not be signing that attestation. What we do is the pre-QoE work: cleaning the ledger, documenting add-backs, reconciling TTM performance to source, building the revenue and margin analyses that the QoE firm will test. When we hand the buyer's QoE firm a clean, reconciled starting package, the QoE runs faster, costs less, and produces adjusted-EBITDA numbers materially closer to what the seller went to market with.
The engagement pairs cleanly with the CPA firm doing the QoE. We prepare and defend; they test and attest. The seller gets a QoE report they can live with instead of one they have to negotiate against.
What Pre-QoE Prep Covers
The six financial workstreams that make a QoE go smoothly.
Ledger scrub and close discipline
Trial balance cleanup. Unrecorded accruals recognized. Cutoff errors corrected. Reconciliations current. The clean ledger is the foundation everything else builds on. Most QoE friction traces back here.
TTM reconciliation to source
Trailing twelve months of revenue, gross profit, and EBITDA rebuilt from the trial balance monthly. Reconciled to reviewed or audited statements where they exist. Reproducible so the QoE firm can validate independently.
Add-back documentation
Every normalization adjustment identified, quantified, and supported with source documentation. Owner comp above market, related-party arrangements, non-recurring items, one-time costs. When the QoE firm asks for support, it exists.
Revenue quality
Revenue recognition policy documented. Deferred revenue and unearned income treatment clean. For SaaS, ARR reconciled to GAAP revenue with a defensible bridge. Contract-level detail available.
Working capital story
Twenty-four months of monthly working capital. Peg definition supported. Seasonality quantified. See Working Capital Peg & Historical Build for the deeper mechanics.
Customer, product, and margin build-outs
Revenue and contribution margin by top customers, product lines, and segments. Concentration analysis with trend. The QoE firm builds these anyway; sellers who bring them lose less to interpretation.
Why buy-side QoE firms welcome sellers who did pre-QoE prep.
QoE fees compress when the reconciliation work is already done. A significant portion of QoE engagement hours is spent rebuilding numbers from the ledger. When the seller hands over clean reconciled starting schedules, the QoE firm's work compresses and the fees compress with it. Sellers frequently see meaningful reductions in the QoE budget.
Fewer surprise findings. The findings that erode value in the QoE process are the ones that emerge mid-diligence and get used to retrade. Pre-QoE work surfaces those items early enough to fix, document, or price into the LOI conversation.
Adjusted EBITDA closer to the seller's number. When every add-back is documented and every judgment call is defensible, the QoE firm's adjusted EBITDA lands closer to what the seller went to market with. The gap between the two positions is where value gets negotiated away.
Faster diligence timelines. A well-prepared package moves through diligence faster. Faster diligence closes deals; slow diligence gives buyers time to find reasons to renegotiate.
The clear separation of roles.
The QoE firm produces the attestation. Big Four, national CPA firm, or specialty transaction advisory firm. They test the numbers, produce the QoE report, and attach their name to it. We don't compete with that role and we shouldn't.
We prepare the underlying materials. The ledger, the reconciliations, the add-back documentation, the working capital build, the customer and margin analyses. The QoE firm tests what we prepare; the banker orchestrates the process; counsel handles legal diligence.
We defend when the QoE firm pushes back. The QoE process is a negotiation. When the QoE firm proposes removing an add-back or restating a working capital item, we bring the supporting documentation and the technical position. The seller doesn't argue with the QoE firm alone.
Everyone stays in their lane. The CPA firm attests. The banker sells. Counsel structures. We prepare and defend the finance function. The seller gets clean handoffs between all four and a QoE report they can live with at closing.
Before the CIM Goes Out
Do the pre-QoE work when it can still move value.
Six to twelve weeks of finance work before the process starts. Coordinated with the banker and, when selected, with the QoE firm. The pre-QoE package becomes the anchor for every EBITDA conversation that follows.
Tell us the situation
The business, the timeline, and the banker if there is one.
Where the process is, what QoE prep has or hasn't been started, and when the CIM is expected to go out. Same-day response.
Schedule a Discovery Call
We’ll reach out within one business day.