One in five broken deals died on a number the seller could have checked first.

What does a quality of earnings report cost?

For most middle-market businesses, between $25,000 and $75,000. The figure is driven by three things in roughly this order: the size and complexity of the business, the tier of firm engaged, and how clean the underlying accounting is before anyone arrives.

At the bottom of the market a boutique specialist will quote $10,000 to $25,000 on a business below $3m of EBITDA. In the range where most sponsor-backed and banker-run processes sit, $3m to $10m of EBITDA, the same work is $25,000 to $40,000 from a boutique, $40,000 to $60,000 from a national specialty firm and $60,000 to $100,000 from a Big Four practice. Above $10m of EBITDA the numbers roughly double at every tier (CT Acquisitions, quality of earnings guide, June 2026).

Complexity is priced separately and is the most common reason a quote lands above the band. Multiple legal entities, operations across several states, and regulated industries each add something in the order of 30% to 50% to a base quote (CT Acquisitions, June 2026). Businesses that have never had an audit, that run on cash-basis books, or that have changed accounting systems inside the review period are quoted the same way.

Elapsed time is more consistent than price. Four to six weeks from engagement to a draft report, plus one to two weeks for management review, is the working assumption, with longer timelines quoted where scope is heavier (CT Acquisitions, June 2026).

Why is the price so hard to find?

Because nobody neutral publishes it, and it is worth being explicit about that before the table above is used to budget anything.

There is no survey of quality of earnings fees. No professional body, regulator or industry association collects them. The accounting firms that rank highest for the query publish careful explanations of what a report contains and how long it takes, and no price at all: one representative national practice describes scope, the two to three years of historical financials examined, and the purpose of the work, without a dollar figure anywhere (Lutz, published 26 July 2023, re-checked and still without a price as at September 2026).

Every published dollar range therefore comes from one of two interested parties. Firms that sell quality of earnings work, and advisors who commission it on behalf of clients. Those ranges are broadly consistent with one another, which is some comfort, but consistency among sellers of a service is weaker evidence than a survey. A widely referenced advisory page puts the full span at $5,000 for a minimal report on a small company to more than $100,000 for a complete report on a mid-sized one, and $10,000 to $20,000 for a business under $10m of revenue using a local firm, and carries no publication date at all (Morgan & Westfield, undated as at August 2026).

The table below is the most granular current schedule available, and it is a practitioner guide rather than a survey. Read it as a quoting convention, and get two or three actual quotes.

Sell-side or buy-side: who commissions it?

Both, for different purposes, at different points, and the distinction matters more than the label suggests.

A buy-side report is commissioned by the buyer after a letter of intent is signed, during exclusivity. Its job is to give the buyer a full understanding of the operations, assets and cash flows of the target, and in practice to find the gap between marketed earnings and real earnings. A sell-side report, also called a vendor report or vendor due diligence, is commissioned by the seller two to three months before going to market. Its job is to identify the issues that could stall a transaction or reduce the price, while there is still time to fix or explain them (CT Acquisitions, June 2026).

A vendor report is shared with bidders under reliance letters, usually with the option for a buyer to top up scope on the areas it cares most about. That is what makes it useful rather than merely reassuring: a report a buyer cannot rely on does not remove the buyer's own report from the timeline.

The buyer still commissions its own work in most processes. The purpose of the vendor report is not to prevent that. It is to ensure the buyer's report confirms a number the seller has already published rather than discovering one the seller has not.

Who should pay for it first?

The seller, on any business where the earnings number requires explanation.

The argument is arithmetic rather than sentiment. Across 75 failed lower-middle-market transactions, a quality-of-earnings gap, meaning real EBITDA below the marketed figure, was the stated cause of 21.3% of failures, and diligence findings of all kinds accounted for roughly 46% to 47% (Axial Dead Deal Report, 2025). A risk the seller surfaces and evidences is a discount avoided. The same risk found by the buyer's accountants during exclusivity is a retrade, negotiated from the weakest position in the process, with no competing bidder left in the room.

There is a threshold below which the spend is hard to justify and above which it is effectively assumed. A third-party report is expected by lenders and investment committees above roughly $20m to $30m of enterprise value, or $3m to $5m of EBITDA, and it is effectively mandatory in sponsor-backed processes. A vendor report specifically is worth commissioning above roughly $50m of total enterprise value, and on any founder-owned business carrying heavy add-backs at any size.

The second-order effect is insurance pricing. Representation and warranty insurance is standard in sponsor-backed auctions above roughly $20m to $30m of enterprise value, per the most recent market review this article has verified, which dates from August 2025 (Reuters Practical Law, Trends in Representation and Warranty Insurance, August 2025), and underwriters tie both pricing and retention to the depth of diligence performed. A vendor report reduces that friction rather than duplicating it.

Which is why the reasonable order of operations is: commission the report before the teaser, not after the letter of intent.

What does the spend buy, and what does it not?

It buys a normalized earnings figure that has survived a third party, which is the number every other term in the transaction is calculated from. It underpins the price, the working capital peg, and the terms a lender will offer. Scope now routinely extends past historical EBITDA into revenue quality, customer concentration, churn and cohort behaviour, margin sustainability and working-capital normalization.

It does not buy an audit, and it is not one. A report examines two to three years of historical financials for quality and sustainability of earnings. It does not express an opinion on the financial statements, and audited statements are not a substitute for it either. The two answer different questions.

It also does not make a weak number strong. A vendor report on a business with genuine revenue-recognition problems produces a smaller, better-evidenced number and an earlier, franker conversation about price. That is worth paying for, but it is not the same as a higher valuation, and any advisor who presents it as one is selling something.