Pre-Sale Financial Cleanup: The 6 Reports Buyers in the U.S. Will Ask For First

If you are preparing to sell your business, the earlier you clean up your financials, the more confident buyers will feel—and the more you can command in price. These six reports are almost always among the first documents that potential buyers or their advisors request.

The 6 Must-Have Reports

1. Profit & Loss Statement (P&L) – Last 12-36 Months
Shows your revenue, cost of goods sold, and operating expenses. Buyers want to see consistent profits or at least upward trends. They will look for unexplained spikes or drops.

2. Balance Sheet
A snapshot of assets, liabilities, and equity. Buyers want clean personal and business separation, clarity on debt, and proper accounting of inventory or equipment.

3. Tax Returns – Business and Relevant Personal
Usually last two years. These help verify income, deductions, and whether everything shown on P&L matches what the IRS saw. Discrepancies will raise red flags.

4. Cash Flow Statement
Especially operating cash flow. Buyers want to understand not just profitability, but how much cash the business truly generates. Does cash stay in the business or does it cycle out through working capital?

5. Accounts Receivable (AR) Aging Report
A list of invoices owed, how old they are (30-60-90+ days past due). High overdue balances signal collection risk. Buyers will discount value if too much revenue is uncollected or at risk.

6. Debt Schedule / Liabilities List
All loans, leases, obligations. Buyers want to see what your fixed costs are. Hidden debts can reduce offers sharply.

Why Each Report Is Important & What to Look For

• Profit & Loss: Consistency matters more than occasional big wins. Trends. Margins. Are costs creeping up?
• Balance Sheet: Are assets properly valued? Is inventory obsolete? Are liabilities transparent?
• Tax Returns: Are you using aggressive deductions or deferring income? Clean tax history builds trust.
• Cash Flow: Does net income translate to cash? A business that reports income but has working capital tied up won’t be valued as high.
• AR Aging: What portion of revenue is collectable? If many customers are slow payers or you have big overdue invoices, the value drops.
• Debt Schedule: Every loan or lease is subtracted by the buyer. Hidden off-balance debt can kill a deal.

How to Clean Up Financials Before Sale

• Hire or consult with a CPA to ensure your books are GAAP or close to it.
• Separate personal and business expenses rigidly.
• Identify and eliminate one-off or nonrecurring expenses.
• Tighten the collections process and resolve delinquent accounts.
• Make liability and debt disclosures early.
• Maintain consistent reporting month over month.

Getting these reports in order takes time, but pays off.

Schedule a consultation with MyBizWorth now if you want guidance on cleaning up your financials, prioritizing reports, and maximizing what buyers will offer.