If you are fixing the books during diligence, you are already late.

The best transaction work starts before the buyer shows up, usually a year or two before, when nothing is urgent and everything is still cheap to fix. Done then, it is bookkeeping hygiene. Done in a live process, the same work is a fire drill performed in front of the person deciding what your company is worth.

The unglamorous list

• A close that lands on the same day every month
• Revenue recognition a third party can follow without a phone call
• Owner expenses identified and documented, not discovered
• Customer and project profitability that holds up to a cohort view
• Working capital you can explain across a full seasonal cycle
• Contracts, leases and related-party arrangements collected in one place

None of it is complicated. All of it takes calendar time, which is precisely what a live deal does not give you.

Why timing changes the price

Quality of earnings work rewards history. An add-back supported by two years of consistent treatment is accepted. The same add-back created the month the process started gets challenged, and challenged add-backs come out of the multiple, not the conversation.

The same logic applies to the forecast. A company that has hit its numbers for eight quarters gets its projections taken seriously. A company presenting its first real forecast during diligence is asking a buyer to trust a document with no track record behind it.

A reasonable starting point

If a sale is somewhere on the horizon, pick a date two years out and run the business as if diligence starts then. Close on time. Document the owner items as they happen. Build the profitability view once and maintain it. Keep the forecast and grade yourself against it out loud.

Do that work early and diligence becomes confirmation. Do it late and diligence becomes negotiation.