Ask five providers what a Quality of Earnings report costs and you will get five answers an order of magnitude apart. That is not because the work is mysterious. It is because the label covers very different amounts of work.
For a lower middle market deal, the market roughly sorts into three tiers.
National and regional accounting firms: $25,000 to $50,000 and up. Built for large transactions. You get depth, a big name on the cover, and a fee structure and timeline designed for a different size of deal. On an SBA-financed acquisition, the fee can be a meaningful share of the buyer's total closing costs.
Specialist firms: roughly $5,000 to $15,000. Firms that do small business QoE work as their main line. This is where most SBA-sized deals land.
The low end: $1,500 to $3,000. Usually a recast spreadsheet rather than a report. Sometimes that is genuinely all a buyer needs. Often the buyer thinks they are getting diligence and are getting a reformatted P&L.
Our own pricing is $7,500 flat for SBA-sized deals. Larger deals are scoped and priced to the work after a call, because the work grows with more entities, locations and revenue streams. The three tiers are laid out side by side in Quality of Earnings providers compared.
Four things, in roughly this order:
Notice what is not on that list: deal size, by itself. A $6 million deal with clean books is less work than a $2 million deal with three years of commingled personal spending. Providers who price purely off purchase price are pricing off the wrong variable.
These get conflated, and the difference matters.
A cheap report is cheap because the scope is thin. Nobody reconciled the books to the tax returns. Nobody tied deposits to reported revenue. The add-backs came from the CIM and were accepted. You paid less because less was done.
An efficient report costs less because the provider has done the work enough times to have stopped reinventing it. We complete around 40 engagements a month and have finished more than 600. What that buys is not shortcuts. It is a request list that asks for the right documents the first time, templates that already handle the reconciliations, and reviewers who recognize a pattern in an hour instead of a day. You know where owners bury personal spend. You know which add-backs a lender will push back on. You know what clean books look like in one industry versus another.
The way to tell them apart is to ask what is in scope, not what the total is. If a provider cannot list the procedures they perform on every engagement, the price is not the thing to be worried about.
That last one catches people. An hourly engagement on a disorganized set of books is exactly the situation where the bill runs away, and it is also the situation where you most need the work done.
The honest framing is not what a QoE costs. It is what the error it catches costs.
A business marketed at $900,000 of SDE, trading at a 3.5x multiple, is a $3.15 million ask. If a QoE gets the sustainable number to $760,000, the supportable value is closer to $2.66 million. That is roughly a $490,000 difference on one engagement.
You will not find a swing that size on every deal. You do not need to. Finding one on a fraction of the deals you look at pays for the reports on all of them.