The numbers in the information memorandum are not the numbers you are buying
These are the issues we uncover most often once we get past the headline P&L and into the general ledger.
EBITDA has been quietly flattered
One-off gains, owner add-backs, and "non-recurring" costs that recur every year. Without a proper quality of earnings review, you are pricing the deal off a number that does not reflect the business you will actually own.
Working capital was never properly normalised
Stock that does not move, debtors that will never be collected, creditors stretched to flatter the cash position before completion. The working capital target in your SPA needs to reflect reality, not a number picked to make the deal look clean.
Undisclosed tax exposure transfers to you on completion
A historic VAT error, an R&D claim that does not stand up to scrutiny, or a director's loan account that was never properly cleared. Buy the shares and you buy the liability, whether or not anyone disclosed it.
Revenue concentration is masked by aggregation
Two or three customers driving the majority of revenue, contracts that are not actually committed, or churn that is improving on paper because the worst accounts already left. The headline growth chart rarely tells you this.
Debt and off-balance-sheet items are not what they appear
Finance leases reclassified as operating costs, deferred consideration from a prior acquisition, or a Bounce Back Loan still sitting on the books. Net debt needs to be reconstructed line by line, not taken from the balance sheet at face value.
Your own adviser is comfortable, not thorough
Plenty of accountants will sign off a light-touch review to keep the deal moving and the relationship friendly. We are engaged to find problems, not avoid them, because a missed issue costs you long after we have moved on to the next engagement.
What a Consult EFC due diligence engagement covers
A structured review of the target's financial and tax position, built to give you a negotiating position, not just a binder of findings.
Quality of Earnings (QoE)
We rebuild EBITDA from the general ledger, strip out one-offs and owner add-backs, and test whether reported profit is genuinely sustainable. This is the single most important number in the deal, and we make sure it is real.
Tax Due Diligence
A focused review of corporation tax, VAT, PAYE and R&D claims to surface historic HMRC exposure before it becomes your problem. We flag what needs warranties, indemnities, or a straight price adjustment.
Buy the shares, not the assets, and historic tax liabilities transfer with the company. HMRC does not care who signed the SPA.
Working Capital & Net Debt
We build a normalised working capital target and a true net debt schedule, so the completion mechanism in your SPA is based on evidence rather than the seller's preferred presentation of the balance sheet.
Revenue & Customer Quality
Customer concentration, contract terms, churn, and pipeline conversion analysed against the historic numbers. Particularly important for SaaS and subscription businesses where reported MRR rarely matches collected cash.
Found two customers representing 41% of reported revenue on a SaaS target marketed as "diversified", which directly informed a £400k price adjustment.
Internal Controls & Red Flags
We assess the control environment around revenue, cash, and payroll, and flag anything that suggests poor governance or, in rare cases, deliberate misstatement. Most issues are simple to explain. Some are not.
Findings Report & SPA Support
A clear, prioritised findings report you can hand to your solicitor and use directly in negotiation. We work alongside your legal team to translate findings into warranties, indemnities, and price adjustments, not just a list of observations.
Proper due diligence vs. your other options
On a deal under roughly £20M, most buyers choose between three approaches. Here is what each one actually delivers.
| Capability | Consult EFC Financial & Tax DD |
No DD Trust & hope |
Big Four Firm £50k–£150k+ |
|---|---|---|---|
| Quality of earnings & EBITDA bridge | ✕ | ||
| Corporation tax, VAT & PAYE exposure review | ✕ | ||
| Founder & partner-level attention throughout | ✕ | ✕ | |
| Fixed fee, agreed before work starts | ✕ | ✕ | |
| Right-sized for an SME or SaaS transaction | ✕ | ||
| Report you can use directly in negotiation | ✕ |
We typically work with buyers who look like this
We are selective about engagements because diligence only protects you when it is done properly and fast enough to keep your deal timetable on track.
Acquiring an SME or SaaS business
You have agreed heads of terms on a target typically valued between £500k and £30M and need an independent review before you commit capital and sign warranties you cannot take back.
Private equity, family office or angel investor
You are deploying capital into a single platform deal or follow-on investment and need a credible, independent view of the numbers without the cost or timetable of a Big Four engagement.
Lender assessing a borrower or security
You are extending debt finance against a business and need confidence in the underlying earnings, cash generation and tax position before the facility is approved.
Management team running an MBO
You know the business operationally but need an independent financial and tax review to support your funder, justify the valuation, and protect you personally as you take on the liability.
From data room access to a report you can act on
Most engagements run two to four weeks. We move at the pace your transaction timetable demands.
Scoping call, free, 30 minutes
We talk through the target, the deal structure, your timetable, and where the real risk is likely to sit. You get a clear scope and fixed fee before anything is agreed.
Data room request & review, week one
We issue a tailored information request, work through management accounts, the general ledger, and tax filings, and flag early questions for the seller's adviser while there is still time to chase answers.
Analysis & QoE build, weeks two to three
We build the EBITDA bridge, working capital target, net debt schedule and tax exposure analysis, with regular updates so you are never waiting until the final report to hear about a problem.
Findings report & negotiation support
You receive a prioritised written report, a verbal walkthrough of every material finding, and direct input alongside your solicitor on price adjustments, warranties and indemnities.
Free · No obligation · Available within 48 hours
Common questions
What is the difference between financial due diligence and tax due diligence?
How long does financial and tax due diligence take?
What size of transaction do you typically work on?
Do you only work on the buy-side, or can you support sell-side preparation too?
What happens if you find a serious issue?
Will you liaise directly with the seller's accountant and our solicitor?
How quickly can you start?
Related reading on diligence & deal risk
Quality of Earnings 2026: Buyer Tests, Red Flags, Fixes
A practical guide to how a QoE review actually works, the questions buyers ask, and how to fix issues before they cost you money.
SaaS Due Diligence Red Flags That Cut Valuation
The recurring issues that erode price in SaaS transactions, from messy MRR data to weak retention evidence.
Selling instead? See our Due Diligence Preparation service
If you are the one being bought, this is how we get your numbers ready before a buyer's adviser ever sees them.
Tell us about the deal. We will tell you the scope and the fixed fee.
No generic packages and no hourly billing surprises. Share the basics of the target and your timetable, and Kish will respond personally with a clear scope of work and a fixed fee, usually within 48 hours.
Confidential · No obligation · Usually a response within 48 hours