Deal CPA

M&A CPA | Specialized in QoEs, Pre-LOI Deal Structuring | Fractional CFO helping buy, sell and operate businesses in $3M-$60M range | 85+ Deals Closed

[Deal CPA @DealCPA]

So we built a transition plan. Brought in a CPA to audit those COGS numbers before close and set up backup support if the employee departed. Cost the buyer a few thousand upfront. Saved them from inheriting a $50k accounting mess. Validate inherited employees' accounting before you sign.

[Deal CPA @DealCPA]

The bookkeeper had been classifying costs in ways that made the seller's margins look better. Maybe intentional, maybe not. But here's what kept me up: this employee's loyalty was to the old owner. If they left post close, buyer had no clue how the books actually worked. Operational disaster waiting.

[Deal CPA @DealCPA]

Had a client walk into closing on a regional services business. 14 year employee handling everything: bookkeeping, payroll, operations. Buyer thought great, continuity. Then we looked at COGS, cost of goods sold, the actual cost to deliver services. Numbers didn't add up right.

[Deal CPA @DealCPA]

Here's what saved him thousands. Those delayed statements revealed quality of earnings issues (profit that actually sticks around after you own it). If he'd signed blind, he would have overpaid for a business that didn't perform. Establish sequencing upfront or walk away.

[Deal CPA @DealCPA]

Had a client walk into my office last month. Seller of a services business kept saying "financials coming soon" but meanwhile demanded he sign the purchase agreement, lock in his deposit, and apply for the loan. Classic trap.

[Deal CPA @DealCPA]

My buyer looked at me and said "Should I just trust him?" I told him no. A seller who delays financial statements while pressuring you to commit is using pressure as a weapon. I made him hold the line: financials first, binding commitments second. The seller eventually delivered.

[Deal CPA @DealCPA]

We renegotiated the whole prepaid deposit treatment and profit split. The lesson: never let the other side control the paper. Your lawyer must own the document from day one, or you'll miss provisions that cost you real money. This one almost did.

[Deal CPA @DealCPA]

Had a buyer walk in last month with deal docs from the seller's attorney. Looked clean on the surface. Then I saw it: seller keeps 100% of customer prepayments (money paid upfront), buyer pays 100% of project costs, and splits profits 50/50 after close. Red flag city.

[Deal CPA @DealCPA]

His own lawyer missed it completely. Why? Because the seller drafted the agreement and his counsel never really owned the document. They just reviewed what was handed to them instead of building the deal structure from scratch. Risk and reward were completely backwards.

[Deal CPA @DealCPA]

I gave him a five step framework: revenue, subtract operating costs, subtract maintenance capex (the equipment money you have to spend to keep the business running), add back only non recurring items and owner compensation, then verify against tax returns. Suddenly he owned the conversation.

[Deal CPA @DealCPA]

Had a buyer walk in last month ready to close on a services business. He'd calculated EBITDA (earnings before interest, taxes, depreciation, and amortization, which is the profit number lenders care about) but couldn't explain which expenses to add back or subtract. He was guessing.

[Deal CPA @DealCPA]

Without a real system, he couldn't defend his valuation to the bank or negotiate with the seller. He didn't know if owner salary belonged in the calculation or if that random one time payment should stay in the numbers. He was flying blind.

[Deal CPA @DealCPA]

Turned out the real EBITDA was materially different. Seller had miscategorized items, missed depreciation (the cost of equipment wearing out over time), and treated other income wrong. The forensic review saved my buyer from overpaying and got the loan approved. Don't trust executive summaries. Verify every line.

[Deal CPA @DealCPA]

Had a buyer walk in with a $3.8M deal on the table. Seller's P&L showed $882K EBITDA (earnings before interest, taxes, depreciation, and amortization). Looked clean on paper. One problem: I couldn't trust a single number on it.

[Deal CPA @DealCPA]

Owner drew $652K that year. Seller said add it back. But $652K in draws doesn't mean $652K in actual add-backs. Line items were fuzzy. Add-backs weren't documented. The math didn't work. Lender was getting nervous. So I rebuilt the whole thing from scratch.

[Deal CPA @DealCPA]

We didn't renegotiate the price down to $3.5M and restructure the seller note instead. Interest only for two years, then five year payout, rate cut from 8% to 7%. That fixed the DSCR to 1.35x and kept everyone at the table. The lesson: owner salary kills deals. Model it first, or you'll be rewriting the whole thing at the finish line.

[Deal CPA @DealCPA]

Had a buyer walk in last week with a $4.4M deal that looked solid on paper. 75% bank financing, seller note covering 20%, his own cash for 5%. The debt service coverage ratio (the amount of cash flow left after paying the bank each year) hit 1.25x. Lenders were happy. Then we dug deeper.

[Deal CPA @DealCPA]

Turns out nobody modeled what the owner would actually pay himself after closing. That salary is real money leaving the business every month, and it tanks your cash flow for debt payments. Once we added it in, the DSCR (how much profit you have to cover loan payments) dropped below what the bank would accept. The deal was broken and nobody caught it until late stage.

[Deal CPA @DealCPA]

Here's what saved him: I told him to call Live Oak (the SBA lender) before signing anything. Turned out they support 4 year balloons on home care deals and can roll unpaid balloon amounts into the back of the loan. But he had to ask. Never assume broker math matches bank math.

[Deal CPA @DealCPA]

Had a buyer walk in last month with a home care franchise deal. 3 year balloon payment (a lump sum due at the end of the loan). Broker's math looked clean. SBA lender would approve it, he thought. Never asked the lender directly.

[Deal CPA @DealCPA]

Then we pulled the actual lender requirements. The balloon timing didn't match. DSCR (debt service coverage ratio, or how much profit you have to pay back debt) was off. Broker assumed one thing. The bank wanted another. Could have blown up post LOI.