If you are buying a small business and you have started calling accounting firms about a quality of earnings report, you have probably had sticker shock. Quotes typically start around $15,000 for a small, clean deal and climb to $50,000 or more for anything with multiple entities, messy books, or a compressed timeline. For a searcher buying a $2 million business, diligence can eat a meaningful slice of the equity check before the deal even closes.
That price is not arbitrary. It is worth understanding what you are actually paying for, because that is the only way to decide how much of it you need.
Where the money goes
A traditional QoE is a labor business. The fee buys senior accountants spending 60 to 150 hours doing roughly four things:
- Data assembly and normalization. Pulling the general ledger, trial balances, bank statements, and tax returns, then rebuilding the financials on a consistent basis. On messy books this alone can be a third of the hours.
- Earnings quality analysis. Testing whether reported EBITDA is real and repeatable: revenue recognition, add-backs, one-time items, and pro forma adjustments.
- Balance sheet and working capital work. Net working capital analysis, aging schedules, and the basis for the working capital peg you will negotiate in the purchase agreement.
- Verification. A proof of cash tying reported revenue to actual bank deposits, plus customer concentration and vendor analysis.
What drives the quote up or down
Firms price on expected hours, so the same levers show up in every quote: the number of legal entities, the quality of the seller's bookkeeping, cash versus accrual records, how many years of history you want covered, and how fast you need it. A single-entity business on clean QuickBooks accrual books is the cheap end. Three entities on cash-basis books with commingled owner expenses is the expensive end.
When the full engagement is worth it
Honestly: sometimes. If your deal is large, if the seller's books are chaotic, if you suspect fraud, or if your investors require a signed opinion from a named firm, pay for the full engagement. A good QoE partner will also support you through the post-LOI negotiation when the findings turn into price adjustments, and that judgment is a real part of what you are buying.
The part software can now do
Here is the uncomfortable truth about that fee: most of the hours are mechanical. Normalizing statements, building the EBITDA bridge, computing working capital trends, flagging anomalies. That work is deterministic, and software does it in about a minute once it can read the target's accounting system.
Zenith generates a 40-tab diligence workbook, including the EBITDA bridge with auto-detected add-backs, a flag log, and full NWC analysis, priced per report rather than per engagement. For deals under LOI where a lender needs reviewed work product, we layer a line-by-line analyst review, a findings call, and a lender-ready summary letter on top. That is the same core analysis a firm would deliver, at a price that makes sense for the size of business searchers actually buy. Current pricing is on the pricing page.
