Buying a business raises real questions about cost, accuracy, and scope. Below are the ones we hear most often from buyers.
A Quality of Earnings Analysis is a detailed review of a company’s financial statements, focusing on the accuracy and sustainability of its earnings.
By conducting a Quality of Earnings Analysis before acquiring a business, you can identify potential red flags—such as overstated revenues, understated expenses, or irregularities in bookkeeping.
This ensures you’re paying a fair price and protects you from unexpected financial pitfalls after you take over.
It’s a valid question: If you have a trusted CPA, why bother with a separate firm for a Quality of Earnings review?
The answer is specialization.
While many accountants handle routine tax filings or basic bookkeeping, they may not dive into the fine details of trailing 12-month performance, add-back legitimacy, or the hidden liabilities unique to small-business transactions.
Tonnesen Accounting Services focuses exclusively on dissecting the seller’s financials from a buyer’s perspective.
We spot anomalies, ensure a realistic owners discretionary earnings, and deliver a crystal-clear snapshot of exactly what you’re buying—so your existing accountant can focus on what they do best.
Buyers are often concerned about paying a price based on earnings projections that turn out to be unrealistic, or bookkeeping that doesn't hold up to scrutiny.
We tackle these worries by meticulously verifying every number and challenging assumptions that don’t align with the bank statements or tax returns.
If the claimed seller’s discretionary earnings (SDE) are off by even a small percentage, that discrepancy can add up to tens of thousands of dollars.
We help you recalculate a fair SDE so you can negotiate a purchase price rooted in reality—protecting your bottom line from day one.
You may worry that an in-depth financial review will drag out your deal, but our streamlined approach was built for speed.
We know sellers want to close as soon as possible—and as a buyer, you need solid data without unnecessary delays.
Tonnesen Accounting Services zeroes in on the core financial metrics, focusing on bank reconciliation, tax return alignment, and the seller’s discretionary earnings.
By maintaining close communication with you and any other stakeholders (like brokers or the seller’s accountant), we keep the process efficient, ensuring you get accurate results in a timeframe that supports your transaction.
We perform analysis, we do NOT provide assurance.
Some buyers think they need a full-blown audit to be absolutely sure of the numbers.
However, that level of scrutiny can be expensive and time-consuming—and it might not even be necessary for small-to-mid-size acquisitions.
We provide a robust Quality of Earnings Analysis that offers an in-depth look at a seller’s finances without the bloated cost of official “assurance.”
Our approach is thorough: We verify the seller’s claims, align financial statements with actual bank records, and ensure you understand every adjustment.
This approach saves you money while offering enough certainty to make a wise, data-backed decision.
A common hesitation is spending money on due diligence, only to walk away from a deal. But consider the alternative: entering a shaky transaction and discovering inflated numbers or hidden debts months later.
A comprehensive Quality of Earnings review might stop you from inheriting a financial mess. And if the deal does fall through, you’ll know you dodged a much bigger loss down the road.
A thorough review either confirms the deal is sound or gives you the leverage to renegotiate before you're committed.