What if the broker’s numbers don’t match what I find in diligence?

A gap between the broker’s package and what your own review finds is something to deal with early and in writing, not something to absorb quietly. BDC describes due diligence as the step where you verify that the numbers match the reality on the ground. A mismatch is therefore the process doing its job. What matters is what kind of gap it is and what you and your advisors decide to do about it before the deal closes.

Work out what kind of gap it is

BDC suggests checking whether the figures match what the owner tells you and whether the tax returns match the financial statements. A difference can come from timing, from an owner expense that was added back, from a one-time item, from an accounting error, or from a figure that was simply wrong. BDC notes that you can have an accountant prepare a quality of earnings report for a more detailed look at the finances. Ask the broker and the owner for the workings behind each figure that does not tie.

Raise it early and in writing

BDC cautions that bringing your lawyer in late can make it look like you are trying to renegotiate the deal at the last minute, compared with discussing the issues earlier in the process. It also says diligence findings can change your perception of the deal and even make you walk away, and warns that some buyers make the mistake of dismissing information that challenges their enthusiasm about the transaction, only to regret it later. Put each difference in a short written list with the document it comes from, and send it to the seller’s side through your lawyer.

Check what the contract says about the numbers

BDC explains that representations and warranties are where the vendor formally describes the condition of the business and discloses known issues, and that indemnities set the compensation owed if those disclosures turn out to be inaccurate. Ask your lawyer whether the broker’s figures, or the ones you relied on, appear in the agreement or its schedules. BDC also says the seller is not liable for misrepresentations forever and that the liability is typically capped, which is one reason to raise a gap before closing rather than after.

Your accountant and lawyer can then help you decide whether the right response is a corrected price, a changed structure, more documents, or stepping back. Our guide to what a diligence finding actually does to a deal covers how findings feed into those choices.