QofE Report: 5 Critical Questions You Can’t Ignore
Buying a business isn’t just about headline numbers. Revenue might look strong, profits seem stable, but dig deeper and you’ll often find hidden adjustments, unsustainable earnings, or risks the seller swept under the carpet. That’s where the QofE Report becomes your financial X-ray. Done well, it validates earnings, uncovers risk, and gives you negotiation leverage. Done poorly, it’s just another costly report.
Here are the five questions seasoned buyers always ask when commissioning a QofE Report.
Why Asking the Right QofE Report Questions Matters
A QofE Report isn’t a plug-and-play module. The shape of the work depends on the scope you define, the provider’s quality, and the data you provide. If you skip asking upfront, you risk:
- Missing deal-killing red flags
- Getting a shallow, checkbox-style QofE report
- Blowing through deadlines because the report is late
- Paying for fluff analysis that no investor or lender respects
Whether a first-time buyer or seasoned acquirer;
Ask these 5 questions to make your QofE Report sharp, safe, and defensible.
1) What’s the Purpose of This Report?
Start with why. Not all QofE reports serve the same purpose. Some are designed for internal validation, others to satisfy investor or lender demands.
- Buyer’s Use Case: Dig deep into churn, customer concentration, margins, and working capital.
- Seller’s Use Case: Clean up EBITDA, normalize expenses, strengthen defenses.
- Financing Use Case: Provide lenders with confidence in future earnings.
One client once ordered a “standard” QofE Report, only to realize later they needed lender-ready adjustments. Cost them 3 weeks and a redo.
Moral: define your endgame first.
2) What’s the Scope of the QofE Engagement?
Scope makes or breaks your report. Some firms merely repurpose financial statements, and that’s not real QofE.
Red flag: If a provider only reviews tax returns or the Profit and Loss statement, you’re not getting a QofE, you’re paying for a glorified compilation.
3) What Is the Timeline, and Can You Meet My Deal Deadlines?
In M&A, time kills deals, and QofE often sit on the critical path. Ask:
- What’s your baseline turnaround time?
- Can you meet exclusivity or LOI deadlines?
- Will a draft preview come before final delivery?
- What data do you need and when?
Realistic timing: 3–6 weeks for a full Report, depending on complexity and data cleanliness. Some parts, preliminary findings, can appear in week 1 or 2. QofE Report providers often warn that delays in data will push the timeline. Always prep the seller’s team early.
4) Who Will Actually Be Preparing the Report?
Be blunt:
- Who leads this QofE Report internally?
- What deals have they handled?
- How often will I interact with them?
- Can I see a sample of their work?
You want analysts who combine accounting rigor with a deal mindset, not just spreadsheet jockeys.
5) What Will the Final Deliverable Look Like?
The value of a QofE Report isn’t in its length; it’s in how clearly it explains earnings, risks, and adjustments. Some reports bury you in 70+ pages of tables with little insight.
Strong reports, on the other hand, are concise, evidence-based, and highlight exactly where you should focus during negotiations.
Should I Order the QofE Before or After the LOI?
Depends on deal size. For large deals, a light QofE Report pre-LOI can refine your terms. In most SMB deals, the QofE Report comes post-LOI during exclusivity. Wait too long and you risk investing time before discovering deal-breakers.
Protect Your Deal with the Right QofE
A QofE Report isn’t a checkbox you mark off; it’s your guard against hidden risks. Ask these five questions and you’ll:
- Catch shallow, invalid engagements
- Choose a provider who delivers real value
- Hit deadlines instead of missing them
- See the true earnings picture, not illusions
- Step into negotiations with confidence
If you’d like help scoping your QofE Report or picking a provider, we’re here.
Book a free consult: Schedule here
Email us at saman@vasl.team
Learn more: VASL M&A Services