Services
What is a quality of earnings review, and why does it matter to me?
A quality of earnings review reconciles your practice management software, your bookkeeping, and your tax returns so that the differences between them are explained before a buyer finds them. Unexplained differences get treated by buyers as ongoing costs, which lowers your EBITDA and therefore your price.
Your practice management software, your QuickBooks, and your tax return almost certainly do not match. That is normal. Most practices we look at have some divergence, and there is usually a good reason for it.
The problem is not the difference. The problem is being unable to explain the difference in a diligence meeting. A buyer who cannot get a clean answer assumes the conservative case — that the expense is real and continuing — and prices accordingly. You lose the value of an add-back you were entitled to, because nobody could account for it on the day it was asked about.
We do this work in advance rather than in the middle of diligence. By the time a buyer asks, the answer is already documented, and the practice is presented in a form their own analysts can verify quickly. Deals that survive diligence tend to be the ones where nothing surprising surfaces in it.
Curious what it's worth?
An indicative range on your practice in about two minutes. Nothing reaches your team, and whether we ever speak is a box you tick.