How Long Does a Quality of Earnings Report Take?

Short answer, two to three weeks from the day we have everything we asked for. Three to four if the books need work.

The longer answer matters more, because hardly any of that is us running numbers. The parts that stretch are almost always the parts you can control.

Where the clock actually starts

Not at engagement. At complete document receipt.

That distinction causes most of the arguments about diligence timelines. When we say two weeks, we mean two weeks from having what we asked for. The buyer hears two weeks and starts counting from the day they signed.

Everything in between is document gathering, and on a small business where the owner is also the bookkeeper, that gap is routinely longer than the fieldwork. We've had engagements where the analysis took eight working days and the documents took four weeks to show up.

What the phases look like

  • Request list out, same day as engagement. There's no reason for this to take longer, and every day it slips is a day added to the end.
  • Document gathering, three days to three weeks. Entirely on the company. A business with a real bookkeeper and clean monthly closes is at the short end. An owner exporting reports out of a system they set up themselves is at the long end.
  • Fieldwork, five to ten working days. Proof of cash, tax return and transcript reconciliation, add-back testing, revenue and concentration analysis, working capital.
  • Management questions, two to four days, overlapping. Every engagement turns up things only the owner can answer. If they're responsive this runs alongside everything else. If not, it becomes the whole timeline.
  • Review and issue, two to three days. Someone other than the preparer reads it before it goes out.

What makes it longer

Books that aren't closed. If the last completed month is four months ago, we're building the trailing twelve month view from scratch.

Multiple entities. Every extra entity adds reconciliation and intercompany work. Three related entities isn't three times one entity, but it isn't close to the same either.

Inventory nobody counted. On cash-basis books with no inventory schedule, you either get a caveat in the report or a delay while someone builds one.

An unresponsive seller. The most common single reason a report runs late, and the one nobody puts in the timeline at the start.

Scope that grows. A second location turns up, or a related-party lease nobody mentioned. Worth doing properly, and it adds days.

What makes it shorter

Mostly one thing. Send everything at once. An engagement where the full document set lands in the first three days finishes noticeably faster than one where it arrives in six batches, even when it's the same volume, because every partial delivery means re-reviewing work we already did.

After that: a named contact at the company who can actually get answers, an accounting file backup instead of exported PDFs, and a seller who understands the questions are procedure and not accusation.

Keeping it off the critical path

Under SOP 50 10 8.1 the lender orders the report, which adds a new place for the calendar to go wrong. The report gets commissioned when the credit file is being put together rather than shortly after the LOI.

Ordered early, a QoE runs alongside legal, the appraisal and the valuation and costs you nothing in closing time. Ordered at underwriting, anything that slips inside it slips your closing.

If you're the buyer, ask your lender at the LOI stage when they plan to order it, and start pulling documents together before anyone asks. If you're the lender, put the trigger at deal acceptance.

On rush work

We can compress a turnaround and it costs more, for the obvious reason that somebody reorders their week. What I'd push back on is compressing the scope instead of the calendar. A report delivered in four days because nobody did proof of cash isn't fast, it's incomplete, and the thing that got skipped is usually the thing that mattered.

Time kills deals and everyone in this business knows it. The answer is starting earlier, not doing less.

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