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Most deals that get repriced or fall apart do not fail in the negotiation. They fail in the data room, six weeks after the buyer's finance team starts asking questions that should have been answered in advance.
Consult EFC provides financial due diligence preparation services for UK SMEs, scale-ups, and SaaS founders selling a business or raising investment. We prepare the data room, quality of earnings, working capital analysis, and buyer Q&A responses to Big Four standards, so you stay in control of the process from first question to completion.
Kish Patel ACA
ICAEW Chartered Accountant
Due Diligence Adviser, Consult EFC
"By the time a buyer's finance team arrives, it is too late to prepare. The businesses that protect their valuation in due diligence are the ones that built the data room before the first NDA was signed."
What we prepare
Why deals get repriced
Buyers do not need a reason to walk away. They need a reason to pay full price. Uncertainty in the numbers, gaps in the data room, and EBITDA adjustments without evidence all give them grounds to reprice. We remove those grounds before they arrive.
Inconsistent monthly management accounts, different versions of results in the data room, or revenue recognition that shifts between periods all raise questions about the reliability of the whole financial story. Buyers flag these immediately and use them to justify a lower offer.
Every add-back and normalisation adjustment to EBITDA will be challenged by a buyer's accountants. Without contemporaneous documentation: invoices, board minutes, clear explanation of one-off nature. Buyers will exclude the adjustment and reduce the headline valuation accordingly.
Missing contracts, VAT evidence, payroll files, IP assignments, or customer concentration schedules all slow the process and signal to buyers that the business is not well managed. In 2026, acquirers associate a disorganised data room with disorganised finances.
The working capital peg is one of the most common mechanisms used to reduce net proceeds after heads of terms are signed. Debtor ageing, creditor timing, stock provisioning, and seasonal swings all affect what a "normal" level looks like. Buyers know this. Most sellers do not, until it is too late.
Financial due diligence: what buyers test
Financial due diligence for a UK SME sale typically covers six core areas. Every one of these will be reviewed in detail. Understanding what buyers look for, and having the answers ready, is the difference between a smooth process and a repriced deal.
1. Revenue quality and recognition
Consistent month-end cut-offs, clear revenue recognition policy, and no material changes in how revenue is recorded across the review period.
2. EBITDA normalisation
Every add-back must be documented with supporting evidence. Personal costs, one-off items, and non-recurring charges all need to be clearly identified, explained, and evidenced.
3. Customer and revenue concentration
Any customer representing more than 15 to 20% of revenue will receive focused attention. Contract terms, renewal history, and the relationship's sustainability will be questioned.
4. Working capital and cash conversion
Debtor ageing, creditor terms, stock provisioning, accruals, and seasonality patterns. Buyers will set a working capital peg based on a normalised average. Being unprepared here costs money.
5. Forecast assumptions
Buyers will assess whether the forecast is credible by comparing it against historical performance. Assumptions must be grounded in evidence, not aspiration.
6. Tax and legal compliance
Tax filings, VAT returns, PAYE compliance, R&D tax credit documentation, IP ownership and any ongoing disputes. Gaps here are often deal-limiting in UK SME transactions.
Service scope
We focus on the areas buyers test hardest, then prepare your documents, numbers, and narrative so you are never caught short mid-process. All work led by Kish, no junior handoffs.
A structured gap review across financial reporting, controls, evidence packs, and the risk areas buyers typically focus on first. We produce a prioritised readiness plan with clear actions and timings.
Full data room structure, folder map, and document checklist tailored to your deal type. We manage the build, file naming conventions, access controls, and audit trails so the room presents cleanly from day one.
Normalised EBITDA build with full documentation of add-backs, one-off costs, and non-recurring items. We anticipate where buyers will challenge and prepare the evidence to defend each adjustment throughout due diligence.
Analysis of debtor ageing, creditor terms, stock provisioning, accruals, and seasonal patterns to establish a defensible normalised working capital position. We model the working capital peg before buyers set it.
Draft responses, supporting schedules, and evidence packs for diligence questions as they come in. We manage the Q&A log and ensure every answer is consistent with the information memorandum and data room.
We work alongside your corporate finance adviser, solicitors, and tax advisers to keep the financial workstream moving at pace. Available for exit sales, investor due diligence, lender reviews, and MBO transactions.
How we approach it
Most SME transactions allow 90 days between instruction and go-to-market. Here is how we use that time.
Full review of existing financial reporting, management accounts, controls, and documentation. We identify every gap a buyer's finance team would find and produce a prioritised remediation plan.
EBITDA normalisation, add-back documentation, working capital analysis, and management account tidy-up. Every number that will appear in the information memorandum is supported with evidence before the data room opens.
Full data room structure built and populated against a standard buyer checklist. Contracts, payroll files, VAT returns, IP documentation, and customer schedules are gathered, reviewed, and uploaded in a clean, navigable format.
We run a buyer-perspective review of the completed data room and financial pack, identifying any remaining inconsistencies, and prepare template answers for the standard questions a buyer's finance team will ask in the first two weeks.
Free · Confidential · No obligation
Due diligence checklist UK
These are the core areas covered in financial due diligence for a UK SME or scale-up sale. By Kishen Patel, ICAEW Chartered Accountant.
3 years of management accounts
Monthly, with consistent format and clear reconciliation to statutory accounts.
Normalised EBITDA with documented add-backs
Each adjustment supported by invoices, board minutes, or written explanations.
Working capital trend and cash conversion
Debtor ageing, creditor schedules, and 12-month working capital movement analysis.
Tax filings: corporation tax, VAT, PAYE
Three years of filed returns, HMRC correspondence, and any enquiry status.
IP ownership and assignment records
Particularly important where founders or contractors created core assets without formal assignment.
R&D tax credit documentation
Claims schedules, technical narratives, and any HMRC correspondence on prior claims.
Customer contracts and concentration schedule
Top 10 customers by revenue, contract terms, renewal dates, and change of control provisions.
Supplier contracts and single-source dependencies
Key supplier agreements with particular focus on any single-source or termination-on-change-of-control clauses.
Revenue pipeline and forecast evidence
Pipeline by stage with probability weighting, compared against historical conversion rates.
Common questions
ICAEW Chartered Accountant · Due Diligence Preparation · London
Book a free call to discuss your timeline, the buyer questions you are likely to face, and what a practical readiness plan looks like for your business. Kish leads every engagement personally, from the first call to the last Q&A response.
Confidential · No obligation · ICAEW Regulated · UK-wide