Guardian Due Diligence vs. The Average CPA

When seeking diligence for your acquisition deal, you’ll need to choose between the services of a CPA firm and a financial due diligence firm like Guardian. Your choice will ultimately depend on your experience level and your deal. Before making a decision, you should consider what each provider includes in their due diligence report and how those offerings will help get your deal done. 

Is speed a priority for you? Do you require negotiation support? CPA and due diligence firms approach those needs differently. Understand what to expect from each provider so you can make your deal happen in a reasonable timeframe and with confidence. 

Speed of Reporting 

The average CPA has a lead time of around three to four weeks to deliver a draft due diligence report. You won’t know much about your target company before then. Such an extended lead time is misaligned with what most acquisition entrepreneurs hope for in a deal timeline. After searching for the right company and the right deal, you’re likely eager to understand if your deal really makes sense. And, more importantly, you want to finalize your deal before it’s disrupted by changes in the market or with your seller.

Guardian works hard to provide clarity inside of one week. You can expect an executive summary that will rule out or highlight 85% of deal breakers. We review the most common problems found in financials and let you know what we find as soon as possible. With this background, you can speak to your lenders, lawyers, and other stakeholders with confidence. The due diligence process will not hold up your deal.

After you receive your executive summary, we will be working hard to dive deeper into your target company’s financials to offer a more complete picture of the company you’re hoping to purchase. Unlike the average CPA firm, we won’t keep you waiting, and when we deliver your final Quality of Earnings audit, it will include more of the detail that you need to know. 

Future Focus 

The average CPA will prioritize last year’s profits. They are concerned with whether your target company’s financials reconcile or whether they have historically followed Generally Accepted Accounting Principles (GAAP). This insight into existing financials will reveal whether the current owner is misrepresenting their company. While this information is important to know before making a deal, the focus should be on a company’s future potential, not its past performance.

You’re not buying last year’s cashflow. You’re buying future cashflow. That’s why our proof of cash analysis focuses on the future. We analyze what last year’s EBITDA or Seller’s Discretionary Earnings can tell us about next year’s ROI. If there is a reason to think that a company’s current cashflow will not carry on after your deal, we will find it. We work to create a clear picture of your target company’s potential so you can finalize your deal assured you will make your ROI on the other side.

Deal Support

The average CPA finishes their work at last year’s profit and last year’s EBITDA. They analyze your target company’s existing financials, and that is where their support ends. You are left to decide on your own how that financial report should impact your deal. Unless you’re experienced in acquisitions, you might be asking: How can you use this report to negotiate a better price or a better valuation? How should I amend my deal strategy based on this report?

Unlike the average CPA, Guardian doesn’t leave you hanging. Wrapped around your due diligence report will be the information you need to make a good deal. We will provide negotiation support, valuation support, and overall deal strategy. We have years of experience making acquisition deals, so we know what red flags to look out for and when a deal seems to be worth your money. We don’t stop at providing financial analysis; we support you in understanding how our findings should influence your deal.

We specialize in helping newer buyers get a good deal done. You don’t need to worry about having the financial background needed to ensure your deal is solid. Our support will help you make the best-educated decision about your deal.

Make the Connection Between Financials and Your Deal

Financial due diligence experts like Guardian take a broader approach to evaluating companies for acquisition. CPA firms consider their job complete after they have thoroughly analyzed a company’s existing financials. They don’t draw connections between their findings and your specific deal. Without a detailed narrative surrounding their report, you might miss important ways that financials can impact your deal and your future success running the company in question. 

With Guardian’s deep, real-world acquisition experience, your due diligence report will mean more. It will provide a clear roadmap for your deal. To get a sense of how our services can benefit your acquisition deal, take a look at our Case Studies. We have worked for both US and European firms to evaluate private equity deals. Our previous clients have saved thousands of dollars, secured financing quickly, and ensured their deals would close successfully. Learn more here.