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Messy Data Isn't an Accounting Problem. It's a Price Problem.

Buyers cannot diligence what you cannot produce. Every week of delay or reconstruction converts directly into retrade risk and a lower multiple.

Cyril BelloirCyril BelloirFinancial Strategist

The week-one request list

Thirty-six months of profit and loss by month. Revenue by customer by month. A contract database with start date, end date, notice period and price. A deferred revenue schedule. And the recurring-revenue bridge.

The bridge is what breaks people: opening recurring revenue, plus new, plus expansion, minus contraction, minus churn, equals closing. Most firms have never built one and cannot build one retrospectively, because the underlying events were never tagged when they happened.

Speed of close is a signal

A monthly close inside ten business days is the baseline expectation. Firms closing in thirty or more are telling a buyer that management runs on instinct rather than numbers.

Messy data adds four to eight weeks to diligence. Every extra month is another month of trading the buyer gets to see, and another opportunity to re-price on a weak one. Long processes break more often than short ones.

Where the cost actually lands

Owners treat reporting as overhead to be minimised — a finance problem, another system nobody wants to fund. But a buyer prices uncertainty into the multiple, not into a cost line.

Sloppy data does not cost you the €40k of the fix. It costs you a turn of EBITDA.

What to do Monday

Ask your finance lead to produce the last twelve months' recurring-revenue bridge within two hours. Whatever breaks in that exercise is your next quarter's project.

Cyril Belloir
Written byCyril BelloirFinancial Strategist

Former CFO of Europe's fastest-growing facility management group, with more than 60 due diligence processes completed.

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Questions we get asked

What financial data does a buyer request first?

Thirty-six months of monthly profit and loss, revenue by customer by month, a contract database with dates and notice periods, a deferred revenue schedule, and the recurring-revenue bridge.

What is a recurring revenue bridge?

Opening recurring revenue plus new, plus expansion, minus contraction, minus churn, equals closing. Most firms have never built one and cannot build it retrospectively, because the underlying events were never tagged.

How fast should a monthly close be?

Inside ten business days. A close taking thirty or more days signals to a buyer that management runs on instinct rather than numbers.

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