§ Method
A P&L is a claim. Bank statements are a record. Payment processors and payroll systems are witnesses. Verification is what happens when you make the claim answer to the record.
§ 01
A P&L is produced by the seller. It reflects choices — what to recognize, when, and how. Every one of those choices is defensible in isolation and, in aggregate, quietly optimistic.
A bank statement is produced by a third party. Cash arrived on a date, from a payer, in an amount. That is not a claim. That is a fact.
Verification is the process of asking the P&L to explain itself in the language of the bank statement.
§ 02
For a business selling through Stripe or Shopify, the processor knows every transaction: gross, refunds, chargebacks, and net payout. We pull 24–36 months of processor data directly and reconcile it three ways: processor gross → reported revenue → bank deposits.
When the three numbers agree, revenue is real. When they don't, we know exactly where the gap is and can usually explain it in one paragraph.
§ 03
A worked example. Seller adds back $42,700 in "discretionary travel" to arrive at adjusted EBITDA. We look at the underlying transactions.
| Category | Amount | Verdict |
|---|---|---|
| Trade shows (booth, freight, staff hotel) | $18,200 | Operating cost — not add-backable |
| Sales trips to top-3 accounts | $14,400 | Operating cost — not add-backable |
| Family holiday coded as travel | $6,100 | Supported |
| Owner personal (unlabeled) | $4,000 | Supported |
Of the claimed $42,700, only $10,100 is legitimately discretionary. The rest is operating cost the buyer will incur post-close. That is a $32,600 EBITDA adjustment — and at a 4.8× multiple, $156,480 off the enterprise value.
§ 04
A Quality of Earnings report is a comprehensive, audit-adjacent document assembled over four to six weeks, priced at $30,000–$50,000, and typically commissioned after an LOI is signed. It is the right tool for the deal you are actually buying.
A Verification Memo is a forensic screen. It answers one question: are the seller's numbers close enough to reality to justify signing an LOI at the price they're asking? It is delivered in days, not weeks, and priced so that killing a bad deal is a rounding error, not a decision.
A good Verification Memo makes your eventual QoE cheaper and faster. It hands the QoE firm a running start — sources connected, reconciliation done, red flags mapped.